December 6, 1996
TO: ACCOUNTING/TREASURERS COMMITTEE No. 48-96
RE: DUE DILIGENCE SURVEY RESULTS
______________________________________________________________________________
Enclosed please find the results of the Due Diligence Survey conducted by the Securities
Operations Subcommittee and the Custodians Advisory Group during the third quarter of
1996.
The purpose of the Due Diligence Survey was to determine what current mutual fund
industry practices are with respect to minimizing the risks of investing in foreign markets with
local sub-custodians and brokers. The survey also sought to determine how fund investment
advisers deal with operational issues in both established and emerging foreign markets.
Finally, the survey looked at how fund investment advisers identify and assess potential risks
and determine the appropriateness of investing in new markets.
To those of you that responded to the survey, thank you for your time and effort. The
resulting report provides a benchmark of the mutual fund industrys current foreign market
due diligence practices against which individual fund investment advisers may compare their
practices.
Questions or comments on the Due Diligence Survey results may be directed to the
undersigned at 202/326-5847.
Diane M. Butler
Director - Operations
& Fund Custody
Enclosure