SUPPLEMENT TO
THE PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
OF
KEYSTONE SMALL COMPANY GROWTH FUND (S-4)
(THE "FUND")
The Fund's prospectus and statement of additional information are hereby
supplemented to reflect the following:
The sections of the Fund's prospectus entitled "How to Buy Shares -
Contingent Deferred Sales Charge," "How to Buy Shares - Waiver of Deferred Sales
Charge," and "Distribution Plan - Arrangements with Broker-Dealers and Others"
are hereby supplemented to reflect the following:
Purchases of Fund shares made for the benefit of a Chilean insurance
company, mutual fund, or retirement plan (a "Chilean Investor") through
broker-dealers or others having a selling agreement with Keystone
Investment Distributors Company ("Keystone"), the Fund's principal
underwriter, in the amount of $1,000,000 or more (each such purchase, a
"Special Purchase") will not be subject to a contingent deferred sales
charge.
In lieu of any other commission,including the 4% commission generally
reallowed to broker-dealers, Keystone will pay broker-dealers or others
commissions for Special Purchases as described below:
o Commissions will be based on (i) the investor's cumulative purchases
during the one-year period beginning with the date of the initial Special
Purchase and (ii) the investor's cumulative purchases during each
subsequent one-year period beginning with the first Special Purchase
following the end of the prior period.
o Commissions will be paid at the following rate: 1.00% of the investment
amount up to $2,999,999; plus 0.50% of the investment amount between
$3,000,000 and $4,999,999; plus 0.25% of the investment amount over
$4,999,999.
o Depending on the respective arrangements made with a recipient, Keystone
may pay such commissions either in full at the time of the Special Purchase
or in installments. If a commission is paid in full, a prorated portion of
such commission shall be returned to Keystone should any shares upon which
the payment of the commission was based be redeemed within a specified
period from the date of the Special Purchase.
September 11, 1996
