Walden Asset Management

March 13, 2003

Office of Management and Budget
Desk Officer for the Securities and Exchange Commission
Office of Information and Regulatory Affairs
Room 3208
New Executive Office Building
Washington, DC 20503

Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549-0609
Re: RIN 3235-AI64/SEC File No. S7-36-02

Dear SEC Desk Officer and Secretary Katz:

Walden Asset Management, a division of United States Trust Company of Boston, is an investment manager with approximately $1.2 billion in assets under management. Walden performs shareholder advocacy and proxy voting services for two mutual funds, Walden Social Equity Fund and Walden Social Balanced Fund, managed by our affiliate, Boston Trust Investment Management. We have been deeply involved in the issue of disclosure of proxy voting by mutual funds and investment divisions.

We submit the following comments, in response to the OMB's request for information related to the Paperwork Reduction Act of 1995, and the cost and burdens of compliance with SEC Final Rule 30b1-4 [17 CFR 270.30b1-4], concerning proxy voting guidelines and vote disclosures by registered management investment companies.

We support the recommendations set forth by the SEC staff and commissioners in their finalized ruling. Based on our long experience of proxy voting we believe they do not burden fund companies or investors with excessive costs or staff labor. The finalized proxy disclosure rule, which went through an extensive comment period on costs, paperwork burdens, and efficiencies, was also supported by the public at large. Some 8,000 investors wrote to the Commission, with the overwhelming majority in support of the rule even before it was modified to further reduce paperwork and cost.

We feel that the final rule makes every effort to provide a level of disclosure that would allow investors and the market at large to scrutinize any conflicts of interest within the industry, while simultaneously encouraging accurate proxy voting record keeping and reporting with minimal expense to investors. A number of fund companies and investment advisers already provide proxy voting reports to the public, and agree that fulfilling this fiduciary duty involves reasonable expense. Also, the costs of tabulating and disclosing votes and guidelines decline over time.

The final rule provides numerous cost savings and benefits, including elimination of the "inconsistent vote" reporting requirement; annual, rather than semi-annual disclosure of voting records; the ability to post guidelines, procedures, and voting records on a fund company's web site, or on EDGAR; and the flexibility of fund companies to meet shareholder requests for voting records and complete voting guidelines through web site disclosures.

Walden's own experience is that proxy voting disclosure is not a significant burden. Walden has a comprehensive approach to proxy voting, which includes posting our proxy voting guidelines and record on our web site. Last spring we posted our proxy voting guidelines and the 2001 proxy voting records for two mutual funds, Walden Social Balanced Fund and Walden Social Equity Fund. The initial development of the text for the new web page required careful attention to detail. The framework, now in place, can easily be used each year. The final step, formatting the data for Internet publication, is a fairly simple process. An employee with basic computer knowledge should be able to easily complete this portion of the disclosure process. If not, there are many computer programs, starting at $70, that help with this step. Future technology developments can be expected to further simplify Internet publishing. Walden's proxy guidelines can be viewed at: http://www.waldenassetmgmt.com/social/proxyvoting.html.

Currently, some mutual fund and investment companies may not be casting their proxies; a practice that we believe should change. Mutual funds and managers have a responsibility to protect, to the best of their ability, the value of their investments. The shareholder votes are a powerful tool in this effort. Many mutual funds are aware of this and are actively voting their proxies and records are being kept internally of their voting decisions. This buttresses the point that the cost of tracking is not significant. Companies have already absorbed the cost of tabulation and tracking. The only additional cost is the electronic publication of these choices, which as Walden's personal experience illustrates, is insignificant.

This collection of information will not only set best practice standards for the fund industry, but will have practical utility as well, for the disclosures empower individual investors, media, and research organizations to scrutinize inconsistent votes, conflicts of interest, and rubberstamping of management proposals--which lessens the burden on regulators to do so. The rule also manages to protect the integrity of the voting process, as funds do not have to disclose their actual votes until well after an annual general meeting has taken place. Additionally, the expense ratios of funds that currently disclose proxy voting records are not higher than those of funds in general [Fund Democracy Comment Letter to SEC on S7-36-02, (Oct. 21, 2002)]. The benefits of transparency therefore seem to outweigh the minimal direct and indirect costs of the rule.


Timothy H. Smith
Senior Vice President
Walden Asset Management