RULE CHANGE TO MANDATE USE OF ACAT FUND/SERV FOR BROKER TO BROKER TRANSFERS OF MUTUAL FUND ACCOUNT POSITIONS

September 12, 1994 TO: BANK BROKER/DEALER ADVISORY COMMITTEE NO. 22-94 BROKER/DEALER ADVISORY COMMITTEE NO. 18-94 OPERATIONS COMMITTEE NO. 24-94 SALES FORCE MARKETING COMMITTEE NO. 36-94 RE: RULE CHANGE TO MANDATE USE OF ACAT FUND/SERV FOR BROKER TO BROKER TRANSFERS OF MUTUAL FUND ACCOUNT POSITIONS __________________________________________________________ The Investment Company Institute is pleased to announce that, on September 2, 1994, the Securities and Exchange Commission approved the mandated use of the ACAT-Fund/SERV link to process all broker to broker transfers of mutual fund account positions. The mandating itself is just one in a series of proposed rule changes to the account transfer process, all of which were approved by the Commission. These changes streamline account transfers by reducing the time period for transferring cash, margin and retirement accounts to seven days. In the case of mutual funds, the rule changes also ensure that, where both the delivering and the receiving brokers are National Securities Clearing Corporation registrants, account positions will transfer via an automated system that enables the conveyance of account registration and option information as well as account assets. The Institute views the mandating of ACAT Fund/SERV processing for the transfer of mutual fund account positions as practical and beneficial. ACATS Fund/SERV transfers offer a complete audit trail, require no administrative work from fund or transfer agency personnel, and virtually preclude the need for corrective maintenance by obviating manual processing. Mandatory use of ACAT Fund/SERV to process mutual fund account position transfers becomes effective March 1, 1995. Implementation of the streamlined seven day transfer process becomes mandatory December 29, 1994. Please ensure that personnel in your firms are aware of these changes, and that operations and systems are updated to accommodate these changes. If you have any questions or concerns regarding mutual fund account position transfers, or the ACATS Fund/SERV link, please do not hesitate to contact the undersigned at (202) 326-5848. Kevin Farragher Director of Operations Distribution & Service Attachment