Fidelity Investments, the nation's largest mutual fund company, seems destined to be one of the highest spenders in the industry on changes to its computer system for the year 2000 date change.

Fidelity will spend at least $152 million from 1998 through 2000 updating its operations for Y2K, according to documents which the SEC made public last week. Total expenses from the start of the project in 1996 through its completion are expected to reach approximately $330 million, a Fidelity executive said.

If these projections prove to be accurate, Fidelity will spend more by far than the next two largest mutual fund companies combined- the Vanguard Group and Capital Research & Management Co.- over the same period. Vanguard plans to spend between $30.5 million and $71 million from 1998 through 2000, according to SEC filings. Capital Research's projected spending is between $22.1 million and $55.5 million during the same period.

It appears that only Merrill Lynch Asset Management, the money management arm of the nation's largest broker/dealer, is likely to spend anywhere near as much as Fidelity. Merrill Lynch Asset Management projected it would spend at least $155 million from 1998 through 2000, according to SEC filings. It was unclear from Merrill Lynch's filings if the expenses were limited to the firm's asset management group or if the projections included the company's broker/dealer business as well. In its most recent quarterly report filed with the SEC in November, Merrill Lynch estimated that its Y2K costs for the entire firm would run $400 million.

A Merrill Lynch spokesperson did not return a call.

The data on spending and Y2K budget projections was included on SEC Form ADV-Y2K, which roughly 6,000 mutual fund companies and investment advisors filed in December. On Tuesday, the SEC put the Y2K forms on its web site:

The ADV-Y2K form filings marked the first time that privately held firms were required to reveal detailed estimates of Y2K costs. Companies whose stock is traded publicly have included projected Y2K expenses in annual and quarterly SEC filings.

As a general rule, larger firms are going to have higher Y2K expenses, said Robert Plaze, associate director of the SEC. But, the correlation between the size of the firm and its Y2K expense as it appears on SEC forms is not automatic, he said.

For example, companies may have purchased new computer systems prior to 1998 and, therefore, have comparatively little Y2K expense to report for 1998 to 2000, Plaze said.

Fidelity, which has assigned more than 500 employees to the Y2K issue, began work on the project in 1996. Bert McConnell, the executive in charge of Fidelity's Y2K program, said last week that costs associated with testing have been the largest expense in the Y2K budget.

Initially, executives expected Y2K preparations primarily to involve rewriting computer code, McConnell said. Fidelity now has built what amounts to a parallel computer system to test its readiness for the date change.

"It really turned out to be a major, major testing problem," McConnell said of the Y2K preparations.

Among other top firms, Putnam Investments, the fourth largest fund firm, expects to spend between $35 and $40 million on Y2K, said Gavan Taylor, chief information officer for Putnam Investments. Franklin Advisors, the fifth largest firm, projected total expenses ranging between $50 million and $60 million, according to its most recent SEC filing.

Merrill Lynch, as of Dec. 31, ranked ninth among fund companies, according to Financial Research Corp.

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