More than 8,500 mutual funds operate in the United States, sending out more than 350 million prospectuses each year on the investment purpose, contents and performance of their portfolios, by one estimate of the Securities and Exchange Commission. Average size: About 52 pages, each.

That's not all the paper and all the filing that goes on, in marketing funds and complying with regulations on the effort. There's information filed with the SEC, fact sheets, responses to institutional mandates, and what appears on Web sites.

Databases have made the compilation of required forms and filings much easier. Investment objectives, fund manager profiles and the like can be stored once and re-used many times, notes Robert A. DeVault, vice president and principal financial officer for Transamerica Asset Management Group, which operates three families of mutual funds. Reports to the SEC are now largely electronic as are internal reports.

"The only stuff that we really do that's printed, that is paper, is the financial reports to shareholders and prospectuses,'' he said. "But that's a requirement."

But Transamerica may be "ahead of the curve,'' DeVault said. According to a series of 35 to 40 interviews of operations executives at investment fund conferences in the United States and United Kingdom this year, 50% indicated that manual processes are the greatest challenge fund firms face in bringing information about their products to market.

"For organizations that are really well set up and have good systems, the time involved can be trivial, hours per month per product, at the worst case,'' said Ronan Brennan, chief technology officer of MoneyMate, the Irish data management software supplier which produced the survey.

But, when homegrown or purchased systems for automating the process are not in place, that can easily expand into "man days or man weeks" each month.

That happens when "the work flow is just completely manual within the company, relying on emails or spreadsheets,'' he said. This "is really prone to being mismanaged.''

The level that such fund managers are "having to go to to ensure the data does not end up in the public domain incorrectly is enormous, because they simply are doing this in a highly manual way,'' he said.

For most companies, the paper treadmill is worse for words, not numbers. Most "have got the quantitative data down,'' said Brennan, with information systems readily able to collect and transmit performance data.

What tends to be problematic, he says, is managing "narrative" data. Subjective information about a fund, such as commentaries, legal texts, performance analysis, investment objectives, strategy descriptions and portfolio manager profiles.

To get this under control, the best way is to codify the work flow and stick to it, he said. Identify who has to create each element of the narrative, who has to review it, who has to approve it and then what happens to it, in getting it out the door and into public view.

To keep on track, extraneous communications, from email to spreadsheets to messages on paper, have to be cease.

Data captured on spreadsheets can be fed into the system. In fact, Brennan recommends spreadsheets for initial capture of all information, whether qualitative or quantitative. That forces words into boxes that can be easily identified and then fed accurately into an automated system.

Once in, all additional communication about words or numbers should be done within the confines of the system, using its tools for this.

That allows operations executives and managers to track exactly what went on at what stage in the process and who performed the action. An executive or a regulator can see who defined an objective or who created a formula, as well as exactly how it is calculated. There's an audit trail.

For instance, before the bust of the subprime market and the credit crisis that ensued, as much as 60%  of some firms' "cash" was asset-backed securities, which, as time proved, was very risky, Brennan noted. State Street Corporation in the United States and Standard Life in the United Kingdom got embroiled in such classification issues.

The tight and automated workflow approach makes it easier not just to produce clear, open and accurate documents, but multiple versions.

Nomenclature matters, for instance. In the United Kingdom, there is not such thing as a "mutual fund," for instance. The term is "investment fund."

Laws in different countries will require different versions of parts of a document. And there are different forms of output emerging, that make use, in effect, of database techniques. Only if information is "boxed" can the kind of tagging required by the eXtensible Business Reporting Language (XBRL) coming into use in the United States for electronic, interactive presentations be satisfied. In Europe, there will be different requirements for a new form of reporting called Key Investor Information documents.

*** Cutting Paper at the End ***

One way of cutting down on paper comes after production is complete. This is replacing full-scale prospecti with "summary" prospecti that may be only six pages each. These have been used by such fund families as Fidelity, Franklin Templeton and OppenheimerFunds, according to New River, a firm working with the SEC to encourage their use.

There the savings come in reduced printing, postage and distribution costs. Overall savings: About 80% of production and distribution expenses, according to Jeffrey Levering, vice president of corporate development at NewRiver.

Capital Research and Management of Los Angeles, for instance, estimated to the SEC that it spent $29 million in 2007 sending 18.2 million pounds of paper to customers and 50 million pounds of carbon dioxide, as a by product, into the air.

But the cutting down of prospecti to six pages from 52 does not mean that all marketing of fund information will get cut down similarly.

In a July 14 webcast hosted by NewRiver, Susan Nash, associate director of the division of investment management at the SEC, noted a perplexing counter-movement. Some firms want to bind summary prospecti for different funds together. One firm even wanted to bind summary information on all its products into one volume.

"We have taken a pretty rigid approach to that question and have said, you can only bind what's available to the actual human that you're sending documents to,'' she said. "We feel it is fairly inconsistent to say, well, we don't want to deliver the whole statutory perspective, but we're perfectly willing to blanket them with documents that aren't even relevant to them.''

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