October 19, 1990
TO: TRANSFER AGENT ADVISORY COMMITTEE NO. 42-90
RE: SUMMARY OF SEPTEMBER 13, 1990 MEETING
__________________________________________________________
As reported at the September 13th meeting, the status of
each of the Advisory Committee's projects is described below.
1. Family Savings Account (FSA) Study
Enclosed is a copy of the subcommittee report addressing
the operational implications of servicing the proposed Bush
Administration Family Savings Account (Transfer Agent Advisory
Committee No. 25-90). Please forward any operational concerns to
Donald O'Connor which will be considered by the ICI for comment
in the event an FSA proposal becomes likely this year.
2. Confirmation Requirements
Ralph Spuehler of Keystone will be sending a survey to the
Advisory Committee members to determine if fund groups are in
favor of a limited reduction in confirmation requirements. The
survey will suggest confirmation mailings be reduced to quarterly
where dividend reinvestment and/or systematic transactions are
the only account activity. Upon conclusion of the survey a
recommendation to the Institute's legal department will be
drafted (subject to Operations Committee approval).
3. Returned by Post Office (RPO)
A task force was formed to update the Operations Committee
RPO (returned by post office) Survey and further research the
cost of processing RPO accounts. This task force will consider
who should bear the burden of RPO charges (ie., all shareholders
or RPO accounts only) and upon completion of their study, will
suggest the appropriate recommendations to the Operations
Committee and Legal Department to allow for the treatment of such
costs. Members of the task force are:
Cynthia Jones (Chairman) Colonial
Mary Bolles Keystone
Jim Olshefski DST
Sharon Romm Delaware Group
-2-
4. TA Signature Guarantee Requirements/Recommendations to ICI
Mutual Insurance
This task force will continue to examine the possibility of
obtaining insurance coverage on certain financial and/or non-
financial transactions that would allow fund groups to eliminate
the requirements for signature guarantees and/or other legal
requirements.
The task force will proceed by analyzing the types of legal
requirements that exist for certain transactions and reviewing
the ICI Mutual policy coverage for such items. Based on the
analysis performed, the task force will recommend which
transactions are candidates for elimination of signature
guarantees. Also the group will suggest the procedures that each
mutual fund complex should be required to follow. Mr. O'Connor
will present the recommendations of the Task Force to the ICI
Mutual Underwriting Committee for further insurance coverage
consideration. Members of this task force are:
Vinny Marra (Chairman) Prudential
Cynthia Jones Colonial
Liz Conrad TSSG
Valerie Hugo Alliance
Mark Rayford T. Rowe Price
Bob Blucke Fidelity
Barbara Hennigar Oppenheimer
Larry Maffia Stein Roe & Farnham
5. Transfer of Assets Survey
The task force assigned to this project has circulated a
transfer of assets survey to 16 member firms to gather data
regarding all transfer requests (both incoming and outgoing)
received during the month of July, 1990. The survey requested
participants complete their responses by October 15, 1990 for the
survey period ending September 30, 1990 (90 days). A reminder
notice was mailed by the task force to survey participants
regarding this deadline. The results of this survey should
determine the length of time it takes various institutions to
transfer assets. All responses will be kept confidential and the
aggregate results will be presented in the ICI's response letter
to the SEC regarding this matter.
6. Tax Basis Accounting For Shareholders
This task force is responding to the Institute's request
for a cost estimate of implementing share basis information to
redeeming shareholders. At the present time, a legislative
proposal appears unlikely. The task force has reviewed the IDS
methodology as part of their analysis and will be compiling their
-3-
cost estimate in the near future. Barbara Moulding will be
distributing a project status report and the IDS presentation
materials to the Advisory Committee members. Committee members
expressed an interest in having IDS repeat its presentation at
the next Advisory Committee meeting.
7. Transfer Agent Regulatory Costs
An ad-hoc committee was formed to research and define the
cost of regulatory compliance as a component of total transfer
agent charges. Upon completion and issuance of the 1989 Transfer
Agent Study report, a task force will be formed to evaluate
future transfer agent surveys and will incorporate the ad-hoc
group's research on regulatory costs. Members of the ad-hoc
group are:
Jack Kutner (Chairman) TSSG
Timothy Hayes Fidelity
Jim Olshefski DST
Ralph Spuehler Keystone
Barbara Hennigar Oppenheimer
8. Stock Certificate Survey
The Advisory Committee members agreed to complete a short
survey on the percentage of shares held in book versus physical
form. The data results will be reported to the Operations
Committee and the Ad-Hoc Committee recently formed to assist the
Institute's work with the "Group of Thirty". The survey will be
circulated by the ICI in the near future and the results reported
to the Advisory Committee.
-----------------------------------
With your involvement and your cooperation on these
projects, we can continue to be effective as an Advisory
Committee to the Operations Committee and as an industry group.
Thank you for your attention and participation.
William H. Smith
Chairman
Enclosure