April 9, 1991
TO: OPERATIONS COMMITTEE NO. 11-91
TRANSFER AGENT ADVISORY COMMITTEE NO. 18-91
RE: SURVEY RESULTS - CONFIRMATION PROCEDURES ON VOICE-INITIATED
TRANSACTIONS
__________________________________________________________
The Institute surveyed the Operations Committee and the
Transfer Agent Advisory Committee (TAAC) last year for
information regarding the confirmation procedures that are
currently employed for voice-initiated transactions. (See
attached memo to Operations Committee No. 23-90 and TAAC
No. 41-90, dated October 18, 1990.)
Completed questionnaires were received from 42 of the 65
fund groups surveyed (a 65% response rate). Of the 42 fund
groups who responded, 7 stated they did not currently offer
voice-initiated transactions. Therefore, the survey results
presented below are based on the 35 responses received from
complexes who currently offer voice-initiated transactions.
The questionnaire asked respondents to list each type of
voice-initiated transaction offered and the corresponding
confirmation procedure followed, including the response time
frame (number of days). Exhibit A indicates the number of
complexes who offer voice-initiated telephone services
(shareholder to representative) by type of transaction. The
results show the majority of respondents currently offer
redemptions (82.9%), exchanges (97.1%) and changes in
distribution options (62.9%) through voice-initiation. In
addition, 23% also offer purchase transactions and 14% offer
address changes, check reordering (for shareholders that have
already established this privilege) and stop payment
transactions.
A summary of confirmation procedures (including the
response time frame) is presented by type of voice-initiated
transaction in Exhibit B. The results indicate that all
respondents are confirming voice-initiated purchase, redemption
and exchange transactions within 5 days for non-money market
-2-
funds. However, because mutual funds companies are not required
to send money market confirmations for each transaction (SEC Rule
10b-10), confirmation procedures of the same voice-initiated
transactions differed slightly for money market funds. The
results show that a small percentage of fund groups are
confirming purchase (14%), redemption (17%) and exchange (12%)
voice-initiated transactions on a monthly basis.
Confirmation procedures for several other types of
transactions are also summarized in Exhibit B. Changes in
distribution options are confirmed by 73% of the survey
respondents, in most cases within 5 days.
Although the questionnaire was structured to obtain
information related to confirmation procedures only, several
respondents voluntarily provided information regarding other
procedures followed for voice-initiated transactions. A summary
of the various procedures followed (including written
confirmation procedures) for voice-initiated purchases,
redemptions, exchanges and changes in distribution option
transactions are displayed in Exhibit C. Because the survey
requested data regarding confirmation procedures only, the
results reported for other procedures followed in Exhibit C may
not be representative of all respondents.
If you wish to discuss any of the results, please call me
at 202/955-3583.
Kathleen C. Joaquin
Director - Operations/
Fund Accounting
Attachments