January 23, 1991
TO: OPERATIONS COMMITTEE NO. 3-91
RE: CHECK AGING STUDY - MONTH OF MARCH, 1991
__________________________________________________________
At their September 17, 1990 meeting, the Operations
Committee agreed to conduct a "checking aging" study of investors
checks presented to money market and other income funds for share
purchases during the month of March, 1991. For this study,
please submit check data for ginnie mae, U.S. Government and
municipal funds as well as money market funds.
For those committee members who were not at the meeting,
the check aging study is being performed at this time in an
effort to determine the time period within which proceeds from
checks deposited into bank checking accounts are being made
available to customers as provided for under the Federal Reserve
Rule implementing the Expedited Funds Availability Act enacted by
the Congress on August 10, 1987.
As was done with the eight previous "check aging" studies
(July 1980, March 1981, November 1982, November 1984, November
1985, January 1987, November 1988 and November 1989), the
attached forms are to be completed by each Committee member for
each type of fund. Please complete a separate form for each fund
and fill out both sides of each form.
In accordance with a special request from the SEC, please
note that, again this year, the survey requests information
regarding foreign checks. Namely, we are requesting that you
separately report the number of foreign checks returned and the
number and corresponding total dollar amount of foreign checks
sent back to drawee banks for collection in March.
Please supply the information requested for the items
enumerated on the form as follows:
(1) The number of checks returned that were drawn
against domestic banks and cleared through the
Federal Reserve System.
(2) The number of checks returned that were drawn
against foreign banks and sent out for special
collection by the fund’s custodian.
(3) The number of redemption requests refused in
March because of uncollected payments (as
set forth as fund policy in No. 4 below).
(4) Each fund’s policy (if any) with respect to how
long investments made by personal check are held
before redemption proceeds are mailed or wired, or
a check is permitted to be drawn against the
shareholder account. Please state the fund’s
policy as set forth in the prospectus.
(5) The total number of all shareholder checks
drawn on domestic banks and cleared through
the Federal Reserve System that were
deposited and cleared in the month of
March for each fund.
(6) The total number of foreign checks sent out
by the fund’s custodian for special collection
in March and their corresponding total dollar
amount.
It is very important that we have maximum participation in
this year’s study. The previous check aging studies have been
most valuable for the Institute in responding to questions before
the SEC, Federal Reserve and the Congress. Participation and
completion of this study by all Committee members is most
important as this will be the third check aging study performed
after the effective date for banks implementing the new rule.
Therefore, as applicable, please forward this memo and attached
forms to the appropriate person within your own organization or
contact your outside transfer agent as soon as possible so that
they can be prepared to start the study on March 1, 1991. If you
are new to the Operations Committee and have not participated in
prior studies and you have questions regarding the study, please
call Donald O’Connor at the Institute.
Please return the completed form(s) and any other responses
or comments you may have as soon as possible in April. Send them
to Rita Pemberton, Investment Company Institute, 1600 M St., N.W.
- 6th Floor, Washington, D.C. 20036. Or, send the completed
study by fax to Ms. Pemberton at 202/293-1058. If you have any
questions, please contact Donald E. O’Connor at 202/955-3550.
Robert W. Blucke
Chairman
Attachments