September 5, 2003

The Honorable William H. Donaldson
Chairman
U.S. Securities and Exchange Commission
450 Fifth Street, NW, Room 6000
Washington, DC 20549

Dear Chairman Donaldson:

Thank you for your September 4th letter.

Like you and many others at the Commission, the Institute and its members are deeply concerned over the allegations described in the New York Attorney General's complaint. The ICI and the fund industry welcome the SEC's immediate and thorough review of these allegations, and pledge our complete cooperation in any efforts you may undertake. If true, the business practices alleged in the complaint grossly abused investor trust. We will do all that we can to make it clear that such behavior is intolerable and inexcusable.

With respect to your specific request, the Institute earlier today wrote to all of our members urging them to (1) seek assurances from their selling broker-dealers and other intermediaries that they are complying with all relevant rules and regulations, and internal policies and procedures, regarding the handling of mutual fund orders on a timely basis, and (2) review their market timing policies and procedures, and fair valuation procedures, for sufficiency in addressing concerns in this area. Our memo noted the vital importance of these issues in maintaining the confidence of mutual fund investors. A copy of the memo is enclosed.

The Institute and its members will do everything in our power to assist the SEC in the days and weeks to come, and will keep you fully informed as our efforts in these and other area continue.

Sincerely,

Matthew P. Fink
President
Investment Company Institute

cc: The Honorable Paul S. Atkins
The Honorable Roel C. Campos
The Honorable Cynthia A. Glassman
The Honorable Harvey J. Goldschmid

Paul F. Roye, Director
Division of Investment Management

Stephen M. Cutler, Director
Division of Enforcement

Lori A. Richards, Director
Office of Compliance Inspections and Examination