March 18, 1992
TO: TRANSFER AGENT ADVISORY COMMITTEE NO. 13-92
RE: STATUS OF COMMITTEE PROJECTS
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The status of each of the Transfer Agent Advisory
Committee's (TAAC) outstanding projects are summarized below.
1. Confirmation Requirements
The Confirmation Requirements Task Force, chaired by Ralph
Spuehler of Keystone, completed a survey last year (see TAAC
Memorandum No. 37-91 for detailed results) which gathered data
with respect to fund groups' confirmation procedures (for money
market and non-money market funds) and their willingness to
reduce confirmation mailings for certain transaction types.
Based upon the survey results, the Institute submitted a letter
to the Securities and Exchange Commission's Division of Market
Regulation regarding the confirmation delivery requirements of
Rule 10b-10 (see TAAC Memorandum No. 3-92). Specifically, the
letter suggests that an amendment to or interpretation of Rule
10b-10 to permit quarterly confirmation of automatic dividend
reinvestment transactions in investment company shares would make
possible the elimination of millions of confirmations annually,
and would result in cost savings to funds and their shareholders
without sacrificing investor protection. The letter also asks
the staff to confirm the Institute's view that automatic
investment plans and systematic withdrawal plans are "investment
company plans" as defined in the rule.
The staff of the Division of Market Regulation advised the
Institute (before the submission of the above letter) that they
intend to recommend that the Commission propose amendments to
Rule 10b-10 along these same lines in the near future. Therefore
it would be unlikely that they would grant a request for an
industry-wide exemption or a no-action position at this time. As
a result, the Institute's letter stated that it was submitted to
assist the staff in expediting the consideration of proposed
amendments to Rule 10b-10, and requests that the staff reconsider
granting industry-wide relief if the proposed amendments are not
imminent.
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2. Legal RequirementsTask Force
This task force, co-chaired by Cynthia Jones of Colonial and
Janet A. Clifford of MFS, has analyzed various legal requirements
that exist for certain types of transactions, taking into
consideration the ICI Mutual Insurance policy coverage available
for such items. Based on their review, a series of
recommendations were forwarded to and discussed at the last ICI
Mutual Underwriting Committee meeting. The Underwriting
Committee has decided to form an ad-hoc group consisting of
members of the ICIM Underwriting Committee and Transfer Agent
Advisory Committee which includes the following individuals:
Bob Galli - Oppenheimer
Ken Cutler - Lord Abbett
Jeanette Fisher-Garber - Federated
Cynthia Jones - Colonial
Jan Clifford - MFS
Bill Smith - Pioneer
The ad-hoc group will meet on an as needed basis, to address
operations/transfer agency legal requirements issues and to
formulate recommendations to the ICIM Underwriting Committee with
respect to insurance coverage. The group's first meeting will be
held on April 10, 1992, where the Legal Requirements Task Force's
previous recommendations will be reviewed in detail.
3. Transfer of Assets Survey
The first Transfer of Assets Survey was conducted last year
and the results indicated that there were numerous reasons why
IRA transfer requests received were not in good order. Because
no discernible trends for the deficiencies noted were
established, the Transfer Agent Advisory Committee agreed to have
this subcommittee, chaired by Jan Clifford of MFS, conduct a
second survey of Incoming and Outgoing IRA Transfers. The second
survey (Phase II) was designed to collect more specific data
regarding both the deficiencies that exist and the timeliness of
monies transferred.
A pilot group (consisting of eight fund groups previously
surveyed in Phase I) has been surveyed for transfers occurring
during the month of November 1991. The Phase II survey results
and the Subcommittee's recommendations to improve transfers of
assets will be presented at the April 9, 1992 Transfer Agent
Advisory Committee meeting.
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4. Analysis of Signature Guarantee Standards
A special meeting of the Transfer Agent Advisory Committee
was held on January 31, 1992 in Washington, DC, to identify
problems and discuss compliance options in connection with new
Rule 17Ad-15 under the Securities Exchange Act of 1934 regarding
acceptance of signature guarantees. The rule was effective
February 24, 1992. (For a copy of the final rule, see TAAC
Memorandum No. 2-92. For a synopsis of the rule and summary of
the January 31, 1992 meeting, see TAAC Memorandum No. 7-92.)
Participants at the January 31 meeting agreed to provide
copies of their written standards to the Institute when they were
completed, so that an analysis may be performed to determine if
there are any generally accepted approaches and associated
language. To date written standards have only been received
from two fund groups. Therefore, we would like to request that
participants of the January 31 meeting please forward copies of
their written standards to the Institute (to either Don Boteler
or Kathy Joaquin by mail or by fax: 202/293-1058) as soon as
possible. An analysis of the written standards received will be
presented at the next Transfer Agent Advisory Committee meeting.
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A meeting agenda for the April 9, 1992 Transfer Agent
Advisory Committee meeting, which will be held starting at 9:30
a.m. at the Capital Hilton Hotel located at 16th and K streets,
NW, Washington, DC, will be mailed by the Institute to Committee
members in the near future.
Kathleen C. Joaquin
Director-Operations/
Fund Accounting