[9690]
February 19, 1998
TO: ACCOUNTING/TREASURERS COMMITTEE No. 7-98
RE: MEETING AGENDAS - FEBRUARY 26, 1998
______________________________________________________________________________
A draft agenda for the meeting of the Accounting/Treasurers Committee and the
Independent Accountants Advisory Group on February 26, 1998 is attached. The meeting will
be held at the offices of the Investment Company Institute, 1401 H Street, N.W. in Washington.
The meeting is scheduled to begin at 10:00 a.m. in the Silver conference room which is located
on the twelfth floor. Lunch will be served and the meeting should end no later than 12:30 p.m.
As you know, the Institute has scheduled a special meeting to discuss the accounting
and operational implications of the European currency conversion on investment companies on
February 26, 1998. The European currency conversion meeting will begin at 1:30 p.m. and
should conclude no later than 5:00 p.m. A detailed agenda for the European currency
conversion meeting is attached.
Due to space constraints, attendance at the European currency conversion meeting may
need to be limited to one person per ICI member firm. If you have not already registered for
the European currency conversion meeting and you plan to attend, please call Agnes Thomas
ASAP at 202/326-5846. Registration for the meeting will be accepted on a first come first
served basis.
Gregory M. Smith
Director - Operations/
Compliance & Fund Accounting
Attachments
INVESTMENT COMPANY INSTITUTE
ACCOUNTING/TREASURERS COMMITTEE
1401 H Street, NW, Washington
February 26, 1998
AGENDA
I. Tax Items
1. Legislative Update
2. Capital Gains Guidance
3. Year-end 1099 Reporting Update
4. State Tax 30% Test
5. IRS Audit Update
6. IRS Examination of Municipal Bonds
II. AICPA Investment Companies Committee Activities
1. Audit Guide: Status & Timing
2. Multi-tiered Structures
3. Revisions to Rule 17f-2
4. FASB "Draft Standard" on Derivatives
5. Proposed SOP "Reporting on the Costs of Start-up Activities"
III. Subcommittee Reports
1. Accounting Policy Subcommittee
a. Current Projects Update
2. Securities Operations Subcommittee
a. Securities Lending White Paper
b. Foreign Corporate Actions Not Registered with SEC
IV. Other Items
1. Year 2000 Disclosure
2. NASD NAV Reporting Update
3. Fair Value Pricing
4. Dividend Payment Policy
5. SEC Yield - Inflation Index Securities
6. Audit Expectations
INVESTMENT COMPANY INSTITUTE
EUROPEAN MONETARY UNION WORKSHOP
February 26, 1998
I. Introduction to European Monetary Union (20 minutes)
Steven Fenton - Chase Manhattan Bank
Status of the "euro" on 1/1/99 (book entry only 1/1/99; coins and banknotes
7/2002; legal status of the euro
Probable "in" countries in 1st wave
Planned Timetable for the Implementation of the Euro (Phase 1, 2, 3)
Equities - redenomination
Debt - redenomination and renominalization
Recap of Areas Impacted (Trading, Cash, Accounting, Systems, Operations, Tax)
Planning for Euro - budgets, staff, systems, strategy
II. Data Management and Pricing (30 minutes)
Michael Atkin - Information Industry Association
Sara Banerjee - Telekurs USA
Role of IIA and Status Report on their efforts
Receiving pricing data in euro
Interfaces and communications network issues
Historical information, benchmarks and indices
Data schema (feed structure, record formats, security masterfile)
Testing
III. Trading, Brokers & Exchanges (30 minutes)
Jim Leman - Salomon Brothers
How will "in" Exchanges quote and trade equities and debt on 1/4/99?
Standard trading lots for equities and debt? Will trading lots change? (Italy)
Rounding methods (number of decimal places)
Receipt of odd lots or fractional amounts due to conversion and redenomination
Historical and published data from exchanges
Dual listed securities (German shares listed on London Stock Exchange), futures,
forwards, options, put/call features on bonds
Open issues
IV. Cash Movement and Securities Settlement (30 minutes)
Yussur Abrar - Citibank
Euro Account vs. Legacy Currency Account (national currency unit) or both?
Standardized hours for cash clearing?
Standard settlement date for "in" countries
Cash and settlement issues that arise during the transition for trades done pre-euro
settling after 1/1/99? (Outstanding fx contracts, outstanding securities trades over
1/1/99 weekend)
Cash Payment Systems: decimals & rounding practice
V. Accounting (40 minutes)
Theresa McGuire - State Street Bank
How will position be converted as prescribed by the European Monetary Institute?
Equities Redenomination - Timeframe and implications
Sovereign Debt Redenomination - Timeframe and implications*
Corporate Debt - Redenomination - Timeframe and implications*
*Rounding rules & Cash compensation execution/cash compensation
quotation/new minimum denomination
Change in accrual conventions for re-denominated bonds vs. New issues
From Libor to "Eurobor"?
Maintenance of fund history for historical reporting purposes
Profit and loss impact due to conversion or rounding effects or one time revaluation
between old and new currency. Impact on NAV, GAAP accounting treatment, tax
status of gain or loss.
Year end implication for funds
VI. Corporate Actions and Income (30 minutes)
William Tyree - Brown Brothers Harriman
Mandatory corporate action treatment. Corporate actions and income announced
and paid in Euro or Legacy?
Redenomination methods: equities, debt
Timing for notification (market and custodian banks)
Issues with income post 1/1/99. Coupons?
Reclaims and Withholding Tax
Issues arising from fund complex redenominating at a different date from when the
issuer redenominates?
Open issues