February 4, 1994
TO: TRANSFER AGENT ADVISORY COMMITTEE NO. 5-94
RE: STATUS OF COMMITTEE PROJECTS
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The following is a summary of each of the Transfer Agent Advisory Committee
projects discussed at the January 20th meeting.
1.) Transfer of Retirement Assets
The Transfer of Retirement Assets task force has held several meetings to
discuss a proposal to develop an automated system for the transfer of retirement
assets. This proposal was presented to NSCC and DTC at a task force meeting on
November 30, 1993. The task force received a joint response from the NSCC and
DTC to the proposal. During the Advisory Committee meeting on January 20th, a
recommendation was made that the task force consider the development of interim
or alternative proposals to expedite transfers of assets. On February 9th, a meeting
of the task force will be held in Boston to evaluate the response received from
NSCC/DTC and the Advisory Committee's recommendations. The task force will
update the Committee on the result of this meeting.
Copies of the task force proposal and the NSCC/DTC response are enclosed.
The task force members are:
Jennefer Baxter Liberty
Jan Clifford MFS
Pat Cooper Keystone
Mary Crooks Oppenheimer
Jim Gearin Fidelity
Rich Giangregorio Pioneering
Mike Gillespie Pioneering
Jack Kelly Merrill Lynch
Larry Kiefer American Capital
Terrie Westren T. Rowe Price
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2.) Abandoned Property
To help prepare for a possible federal regulatory initiative, committee members
recommended the formation of a task force to catalogue the practices of mutual fund
transfer agents in seeking to locate lost shareholders. While the Operations
Committee has, in the past, been surveyed on this issue, an updated survey may be
necessary to document current in-house search techniques and the use of outside
services by mutual fund transfer agents. The SEC's Division of Market Regulation
is currently meeting with industry groups to gain an understanding of what measures
transfer agents use to locate lost or missing shareholders. Information gathered by
the task force will be useful to the Institute in representing the industry's interest in
discussions with the SEC. The task force members are:
Vincent Marra (Chairman) Prudential
Katherine Cook Nationwide
Joan Dowd BFDS
William Fronk Kemper
Cynthia Jones Colonial
Steven MacNeil Scudder
3.) Gifts of Shares
During the Advisory Committee meeting, members discussed recommendations
to improve the process by which donations of mutual fund shares are made to non-
profit institutions. The Institute has been contacted by a national organization of
recipient institutions regarding difficulties its members are encountering with gifts of
shares. Some benefactors have experienced long delays in effecting gift transfers
due to the legal requirements requested for this type of transaction. The Institute
agreed to seek the development of simplified instructions for these transactions.
Randy Gore (DST) proposed that the non-profit institution submit a request to
have the shares be redeemed on the sme day as the shares are transferred. His
proposal is enclosed. Members are asked to provide comments on the proposal to
Justine Phoenix (202/326-5850) by February 28, 1994.
4.) Power of Attorney
The Institute received a letter from a financial planner who felt that the legal
requirements for a Power of Attorney were out-dated and burdensome. The letter
was distributed to Committee members at its September 27, 1993 meeting and
discussed on January 20th. The consensus of the committee was that, in general,
the current legal requirements to transact a redemption with a Power of Attorney
were appropriate and in the interest of protecting the shareholder's assets. The
Institute will respond to the financial planner and express the consensus of the
Committee as discussed at the January 20th meeting.
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5.) 401(k) Third Party Administrators
The Committee discussed a proposal by Peggy Schooley (American Funds
Service Company) to meet with 401(k) Third Party Administrators and discuss
operational issues and concerns as they relate to transfer agents. Also, for
consideration was the discussion of transmission processing to allow for a more
efficient update of plan participant transactions to the mutual fund's transfer agent
system. Committee members volunteered to provide contacts at the following firms:
Craig Alvey (Winsbury) Barclays
Ed Falvey (Keystone) Mercer
Debra Lee Goldberg(TSSG) ACTI
Larry Kiefer (American Capital) Trust Consultants
Joe Jimenez (USAA) Hazelhurst
Hewitt
Peggy Schooley and Justine Phoenix will contact the firms to determine the level
of interest in a possible meeting with the Transfer Agent Advisory Committee and
will update the Committee on the results of these discussions.
6.) NSCC and New Fund/SERV
Greg Spero (NSCC) updated the Committee on the progress of new Fund/SERV.
The deadline for converting to new Fund/SERV is June 30, 1994; at this time old
Fund/SERV will cease to exist. At the Committee's recommendation, the Institute
agreed to send reminder notices to member firms who have not contacted the
NSCC
with regard to their plans for converting to new Fund/SERV. The NSCC provided
the Institute with a list of these firms and on February 1st, Kevin Farragher sent them
a memorandum reminding them of the NSCC deadline.
7.) Transfer on Death
At the Operations Chairman Advisory Group meeting in October, 1993
members were asked to provide copies of their procedures for Transfer on Death.
The Institute has received copies from Oppenheimer and Kemper. Several
Committee members expressed interest in receiving copies of these procedures.
Enclosed are: Oppenheimer and Kemper's procedures, Securities Transfer
Association procedures and an article from the Probate Law Journal of Ohio (date
May/June 1991).
Your contributions and your involvement on these projects is greatly
appreciated. The next Transfer Agent Advisory Committee meeting will be held on
April 27, 1994 in Washington. D.C. A separate meeting notice will be mailed to
Committee members. If you have any questions, please contact me at 202/326-
5850. Thank you for your participation.
Justine Phoenix
Director-Operations/
Transfer Agency