1998.06.30.Joint.Comment.Letter

INVESTMENT COMPANY INSTITUTE ASSOCIATION OF GLOBAL CUSTODIANSJune 30,1998Barry P. BarbashDirectorDivision of Investment ManagementU.S. Securities and Exchange Commission450Fifth Street,N.W..Sto5-6pWash/ngton, D.C. 20549Re: Evaluation of Depositories under Amended Rule 17f-5Dear Mr. Barbash:The Investment Company Institute' and the Association of Global Custodians:are submitting for your consideration a package of proposed amendments to Rule 17f-5under the Investment Company Act of 1940 with respect to the evaluation ofdepositories.' We believe that these amendments are necessary because it has becomeapparent that it is not possible for US. banks, qualified foreign banks ("custodianbanks"), fund boards, or investment advisers to meaningfully evaluate depositoriesunder the criteria currently set forth in Rule 17f-5(c).' Because of the problems identified' The investment Company Institute is the natioi_l association of the American investment companyind,,-try. Its memkere_p includes 7,091 open-end investment companies ("mutual funds"), 437 closed-endinvestment companies and 9 sponsors of unit investment trusts. Its mutual fund members have assets o|about $4.989 trillion, accounting for approximately 95% of total industry assets, and have over 62 millionindividual shareholders.:The Asacclation is an informal group of ten U.S. banks that are major providers of global custody servicesto U.S. mutual funds.' The Sacuntios and ...