From: olson@lafn.org
Sent: Thursday, October 31, 2002 9:01 PM
To: rule-comments@sec.gov
Subject: File S7-36-02

Comments on "Proxy Voting by Registered Management Investment 
Companies"


Fund For Stockowners Rights
Carl Olson, Chairman

National Headquarters
P.O. Box 65563
Washington, D. C. 20035
703-241-3700

West Coast Office
P.O. Box 6102
Woodland Hills, California 91365
818-223-8080

     Fund For Stockowners Rights is a nonprofit research and education 
group that promotes the involvement of stockowners in the governance of 
their corporations.

     The proposed rule is long overdue.
      Stockowners have been shortchanged with their management 
investment companies due to the lack of knowledge of how these 
companies vote the stock in their portfolios.  The damage has been two-fold:
        1.  It is unreasonable for a management investment company to keep 
secret from the clients this information about the very important voting 
power of stockholdings.
        2.  Because of the secrecy about proxy voting, management 
investment companies tend either to be arbitrary to vote always with 
management, or to avoid making any analysis of the voting, or to bend 
toward managements due to a conflict of interest with another part of the 
firm containing the management investment company.
        Voting of shares is an integral part of stock management.  It is a 
potent way for stockowners to improve their corporations.
        Much of the current wave of corporate corruption exposures can be 
attributed to the lack of effective oversight by interested parties.  For too 
long the management investment companies have not been using their day-
to-day professional ability to analyze corporate behavior toward the ends of 
turning around poor financial performance and discouraging outright fraud.
        Not only do the clients suffer.  The whole economy suffers from this 
currently untapped potentially-powerful force for better economic 
performance.  Unexamined managements are like mice who play while the 
cat's away.
        Good management investment companies will gain a competitive 
advantage by adopting and exercising active proxy voting policies to benefit 
the stockowners.  Those active management investment companies will 
undoubtedly benefit by positively influencing the financial performance of 
the corporations in their portfolios--and thus attract more clients.  Success 
breeds success.
       As a whole, management investment companies have voting powers 
over billions of shares of stock in thousands of companies.  This power, 
when exercised in a thoughtful manner, will work wonders.
       Again, the rule is long overdue.