April 29, 1991
TO: MARKETING COMMITTEE NO. 16-91
INDUSTRY STATISTICS COMMITTEE NO. 6-91
RE: MINUTES, MARCH 27TH MEETING
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The Committee on Industry Statistics met on March 27th. These
minutes are divided into five issues that were discussed.
Issue 1. Current status of centralized collection initiative
Institute staff reported on the status of the initiative to
become the centralized collection agency for the industry.
Developmental tasks for this initiative have been divided into
five tracks. Following is a status report for each.
TRACK I - Collection and dissemination of performance related
data
The Institute has acquired a historical database consisting of
raw performance related data, NAV and distribution
information, from ICDI with the agreement that monthly updates
will be provided. No dissemination of the ICDI data beyond the
members is possible under ICI's contract with ICDI until after
June 1, 1992.
Diskettes containing historical information on approximately
2600 funds from 1962, or year of inception, until present are
available to members for a fee. The monthly updates of this
data can be obtained by member subscribers via the FUNDS
system. The closed end pricing data, collected by the
Institute, are also accessible though FUNDS. A letter mailed
to members regarding the availability of these statistics
generated many positive responses; 16 expressed interest in
the open end performance related data and nine in the closed
end pricing data.
Track I is complete except for a proprietary license
prohibition against multiple simultaneous use of FUNDS
software in the license agreement between the ICI and the
developers of FUNDS. It is expected that a resolution allowing
expanded use can be obtained.
TRACK II - Marketing of third party vendor software and products
via FUNDS II
The FUNDS II system will be available for vendors to
distribute their products and services. Vendors may also
provide software for our members designed to manipulate the
raw performance related data and integrate it with other ICI
data available via FUNDS II.
Of the 12 vendors contacted regarding the central collection
initiative, six expressed interest. ICI will aid vendors'
services by conducting workshops to introduce members to their
products.
It was suggested that vendors may want to adopt pricing
structures that recognize differences in ICI members'
abilities to pay. Concerns arose about attracting service
providers whose products and prices are appropriate for
various segments of the membership, especially the smaller
fund groups.
TRACK III - Collecting primary performance related information by
ICI
ICI is receiving the NASDAQ feed in preparation of daily
collection. At present the data is being transferred but is
not yet being captured or stored. A cross reference will be
set up between the NASDAQ ticker symbol and the ICI fund
number. ICI is exploring the possibility of receiving a feed
from the NSCC to supplement and verify this data. Any funds
not reporting to NASDAQ will be asked for their cooperation in
supplying their data.
Beginning June 1991, ICI will request monthly performance
related data from the funds while continuing to receive
similar data from ICDI. This monthly collection will be used
to confirm daily information, to gather information that is
not supplied daily, and to lay the foundation for collection
while allowing comparison to an independent source, ICDI.
Finally, it gives us our own data base free of the licensing
restriction placed by ICDI.
TRACK IV - Collection of nonperformance related information
The growth and diversity of the mutual fund industry, as well
as the increase in public, media and governmental interest in
funds, has created extraordinary demand for data. A universal
questionnaire has been designed to collect all the non-
performance related data that is required by third party
vendors. After review by the Committee, it was suggested that
certain data items be moved to the monthly questionnaires that
produce TRENDS.
ICI is building its staff in preparation for the collection
and dissemination of data. ICI may also hire consultants to
advise in collection procedure, particularly in verification
of data.
TRACK V - Dissemination of data
The data will be distributed to a broad base of subscribers,
ranging from Institute members to third party vendors and the
media.
Issue 2. Location and structure of the data collection
initiative
A letter from Bill Crawford, President of ICDI had been mailed to
the members of the Committee. Mr. Crawford suggested that ICDI
should be considered to become the central collection agency. It
was decided that though the cost of a Des Moines location would
be less, ICI cannot enter into such an agreement because it would
appear as if ICI were favoring a single vendor. Another
deterrent is that many members would be reluctant to give
confidential data (sales and redemptions) to an outside agency.
Lastly, members must feel assured that the central collection
agency is financially sound. Given all these considerations it
was felt that ICI is the only viable candidate.
Issue 3. Technical design
The technical design of FUNDS II (Fund User Network Dissemination
System) was presented by Mike Halbrook. At the center of the
FUNDS II system is a host communications system that, along with
the user's PC, controls the collection and distribution of data.
FUNDS II is designed to run at multi-sites to transmit data and
to receive data.
Issue 4. Access to data
A concern raised by the Committee was that members must have
control over who has access to their data. A flag system could
be set up to restrict certain vendors from obtaining their
information. The data could also be restricted by the Institute
through the pricing of the service.
Issue 5. Timing of portfolio data
To eliminate the problem of those funds whose quarter ends are
not on the calendar quarter, there was a suggestion that an as-
of-date be included on the universal questionnaire.
Issue 6. Use of transfer agents
Committee members discussed whether Transfer Agents could aid in
the data collection process. It was thought that large Transfer
Agents could transmit data for any fund groups directly to the
ICI, thus speeding up the collection process. The general
consensus of the Committee was that they need to review and clean
up data coming from the Transfer Agent before it is ready to be
passed to the Institute and therefore that source is not viable.
Anne Schafer
Director,
Statistical Research