December 23, 2002
The Securities and Exchange Commission
Re: Comment on the frequency of disclosure of mutual-fund holdings
Buyside Research endorses quarterly reporting of mutual fund holdings. Buyside Research also suggests the Commission consider modifying disclosure regulations to require that these holdings be identified by CUSIP number.
Commonly, the text descriptions of N-30Ds (an example of the files I refer to, maintained on the Commission's web site, would be http://www.sec.gov/Archives/edgar/data/36405/000093247101500324/0000932471-01-500324-index.htm) do not clearly identify all of the issues owned by a fund. With no specific reference to the file referenced as an example, these records often do not distinguish between classes of stocks, whether the issue is common or preferred, if there is a dividend rate distinguishing issues, etc. CUSIPs have been designed specifically to avoid this kind of confusion, are universally employed by mutual funds and are easily appended to these records.
Just as Disclosure appends CUSIPs and formats 10K and 10Q statements, some company could perform the same processes for N-30Ds. Indeed, many funds already submit holdings data to vendors on a voluntary basis; these data have CUSIPs and are formatted for computers. Several other data vendors -- with no cooperation from mutual funds -- create holdings databases with CUSIPs and formatted for computers from all N-30Ds; these data include more funds than the voluntary submissions but are less accurate. The point here is that with only a little prodding and organization, holdings data could be easily identified by CUSIPs and made available in a format usable by computers.
Only when mutual fund holdings are identified by their CUSIP numbers will the Commission's purpose for holdings disclosure, semiannual or quarterly, be achieved.
Thank you for your consideration.
James G. Squyres
One Mansfield Place · Darien, CT 06820-2815 · (203) 655-6936