April 10, 1990
TO: MEMBERS - ONE PER COMPLEX NO. 16-90
OPERATIONS COMMITTEE NO. 7-90
RE: ICI SURVEY OF MUTUAL FUND CUSTODIAN SERVICES AND FEES
__________________________________________________________
The Institute has commissioned the accounting firm of Price
Waterhouse to perform a comprehensive study of mutual fund
custodian services and fees similar to the surveys performed for
the Institute in the transfer agent area by Coopers & Lybrand.
The Institute's objective in conducting the study is to
provide a report that will serve as an important source of
information for fund managers and directors in evaluating their
custodian arrangements.
The survey has been designed to:
1. Provide a more complete understanding of mutual fund
custodian operations with regard to both domestic and
global custody.
2. Enable participants to make meaningful comparisons to
industry data in evaluating their own custodian
contracts.
3. Identify the emerging trends in domestic and global
services provided by custodians.
4. Ascertain the degree to which competition exists
among custodians for both services and fees, by
determining the extent to which various services are
available and their associated fees.
5. Provide insights into developments regarding
fund/custodian relationships and worldwide security
settlement and clearing operations.
6. Establish a baseline for future analyses, including
future Institute studies.
-2-
The 1990 Custodian Survey questionnaires will be sent to
fund participants who are selected as part of a representative
sample of the Institute's data base of member funds from among
the various categories of fund types. The sample will consist of
approximately 275 funds drawn from 50 different complexes and
will represent broad coverage of the major custodians in the
industry, including some regional custodians.
IT SHOULD BE NOTED THAT AS WITH OTHER SIMILAR SURVEYS, THE
1990 CUSTODIAN SURVEY REPORT WILL BE PROVIDED ONLY TO FUND GROUPS
WHICH CHOOSE TO PARTICIPATE. THE OBLIGATIONS OF PARTICIPANTS ARE
(1) TO FURNISH CUSTODIAN FUNCTION AND COST DATA ON A CONFIDENTIAL
BASIS TO PRICE WATERHOUSE IF REQUESTED AND (2) TO PAY A SHARE OF
THE COST OF THE SURVEY. SOME PARTICIPANTS MAY NOT HAVE TO
PROVIDE DATA SINCE THE SURVEY WILL BE BASED ON DATA FROM A
REPRESENTATIVE SAMPLE OF FUNDS, BUT EQUITY REQUIRES THAT ONLY
GROUPS WHICH AGREE TO PROVIDE THEIR DATA RECEIVE THE RESULTS OF
THE SURVEY. The cost of the custodian survey will be shared by
the participants in accordance with an asset based fee schedule.
The cost of participation in the survey, which will be billed
prior to distribution of the final report, is as follows:
CUSTODIAN SURVEY PARTICIPANT FEES
Total assets of Open-end Funds Member Participation
in Complex (as of 3/31/90) Fee
Over - $10 Billion $7,500
$5 - $10 Billion $6,000
$2 - $ 5 Billion $4,500
$1 - $ 2 Billion $2,500
$0.25 - $ 1 Billion $1,250
Under - $ 0.25 Billion $ 750
The Institute will sponsor a one-day workshop at The
Madison Hotel in Washington, D.C. on May 2, 1990 for member firms
and their custodian bank representatives who have agreed to
participate and have been selected for the survey sample. The
purpose of the workshop is to review the survey questionnaire in
detail with individuals who will be responsible for actually
completing the questionnaire and to answer as many of the
questions as possible that will inevitably arise throughout the
course of the survey. Survey team members of Price Waterhouse
will lead the discussion, which will include a general overview,
detailed review, and a question and answer period. Based on our
experience with other surveys performed in prior years, this
-3-
workshop will be extremely valuable in facilitating the timely
delivery of accurate data. If you agree to participate and are
selected for the survey, we strongly urge you to send the
appropriate person(s) to this workshop. Complexes selected for
the sample will be notified in advance of the workshop and will
be supplied with further details regarding the workshop and a
copy of the survey questionnaire for review. A registration form
has been attached for your convenience should your complex be
selected for the sample.
ACTION REQUESTED
Your organization is invited to participate in the
custodian survey. So that we may proceed with this project as
quickly as possible, it is important that we hear from you
promptly as to your interest in participating. Please return the
attached Participation form to the Institute by Friday, April 20,
1990 to indicate whether or not your organization will
participate. You may contact Donald E. O'Connor, Vice President
- Operations (202/955-3550) if you have questions about this
project.
David Silver
President
Attachments
INVESTMENT COMPANY INSTITUTE
1990 SURVEY OF MUTUAL FUNDS CUSTODIAN SERVICES & FEES
PARTICIPATION FORM
CHECK ONE
[ ] The mutual fund group listed below agrees to
participate in the Investment Company Institute Survey
of Custodian Functions and Fees. Participation
includes a commitment to furnish custodian function and
fee information if one or more funds in your group are
selected for the Investment Company Institute/
Price Waterhouse sample and a pledge to pay a share of
the survey cost based on the total open-end fund assets
of your group.
[ ] The fund group listed below will not participate.
FUND GROUP: ____________________________________
ADDRESS: _______________________________________
________________________________________________
________________________________________________
TOTAL ASSETS 3/31/90: _________________________
SURVEY CONTACT PERSON: _________________________
TELEPHONE: _____________________________________
____________________________
AUTHORIZED SIGNATURE
____________________________
NAME
Return or fax to: Mr. Donald E. O'Connor
Vice President - Operations
Investment Company Institute
1600 M Street, N.W. - 6th Floor
Washington, D. C. 20036
(FAX No. 202/293-7016)
INVESTMENT COMPANY INSTITUTE
1990 SURVEY OF MUTUAL FUNDS CUSTODIAN SERVICES & FEES WORKSHOP
May 2, 1990
The Madison Hotel
15th & M Streets, NW
Washington, D.C.
10:00 a.m.
REGISTRATION FORM
NAME: _________________________________________________
FIRM: _________________________________________________
ADDRESS: _________________________________________________
_________________________________________________
TELEPHONE NO. ___________________________
NOTE: THIS FORM SHOULD ONLY BE COMPLETED FOR COMPLEXES
SELECTED FOR THE SURVEY SAMPLE. PLEASE KEEP THIS FORM
HANDY SHOULD YOU RECEIVE NOTIFICATION THAT YOUR COMPLEX
HAS BEEN SELECTED.
Please return or fax by Friday, April 27th to:
Ms. Kathleen Joaquin
Investment Company Institute
1600 M Street, NW - 6th Floor
Washington, D.C. 20036
(FAX No. 202/293-7016)
If you need a sleeping room for the night of May 1,
1990, please call The Madison Hotel at 202/862-1600
as soon as you are notified that your complex has
been selected for the survey sample, and ask for the
Investment Company Institute block.
(Single/double: $145.00 a night)