[C]
SECURITIES AND EXCHANGE COMMISSION ------------------------
WASHINGTON, D.C. 20549 OMB Approval
FORM N-17f-2 ------------------------
OMB Number 3235-0360
Certificate of Accounting of Securities and Similar Expires: July 31, 1994
Investments in the Custody of Estimated average burden
Management Investment Companies hours per response. 0.05
Pursuant to Rule 17f-2 [17 CFR 270.17f-2]
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1. Investment Company Act File Number:
002-79285
Date examination completed: May 30, 1997
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2. State identification Number: N/A
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AL AK AZ AR CA CO
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CT DE DC FL GA HI
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ID IL IN IA KS KY
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LA ME MD MA MI MN
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MS MO MT NE NV NH
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NJ NM NY NC ND OH
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OK OR PA RI SC SD
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TN TX UT VT VA WA
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WV WI WY PUERTO RICO
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Other (specify):
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3. Exact name of investment company as specified in registration statement:
ARCH FUND INC
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4. Address of principal executive office (number, street, city, state, zip code)
3435 Stelzer Rd, Ste 1000, Columbus, OH, 43219
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To the Board of Directors of
ARCH Fund, Inc.
and the
Securities and Exchange Commission:
We have examined management's assertion about the ARCH Fund, Inc.'s (the
Funds') compliance with the requirements of subsection (b) and (c) of
Rule 17f-2 under the Investment Company Act of 1940 (the Act) as of May 30,
1997 and for the period from November 29, 1996 through May 30, 1997,
included in the accompanying Management Statement Regarding Compliance With
Certain Provisions of the Investment Company Act of 1940. Management is
responsible for the Funds' compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about
the Funds' compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly,
included examining, on a test basis, evidence about the Funds' compliance
with those requirements and performing such other procedures as we
considered necessary in the circumstances. Included among our procedures
were the following tests performed as of May 30, 1997 and for the period
from November 29, 1996 (the date of our last examination) through May 30,
1997, with respect to securities transactions, without prior notice to
management:
1. Confirmation of all securities held as of May 30, 1997 by
institutions in book entry form by the Federal Reserve Bank of
St. Louis, Bank of New York, Depository Trust Company, John
Nuveen & Co., Aquila Distributors, Federated Investors, Chase
Manhattan Bank, and Bankers Trust Company;
2. Verification of all securities purchased/sold but not
received/delivered and securities in transit as of May 30,
1997 via examination of underlying trade ticket or broker
confirmation;
3. Reconciliation of all such securities to the books and records
of the Funds and the Mercantile Bank; and
4. Agreement of five selected security purchases and five selected
security sales since our last report date from the books and
records of the Funds to broker confirmations.
We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Funds'
compliance with specified requirements.
In our opinion, management's assertion that the Funds were in compliance
with the above mentioned provisions of Rule 17f-2 of the Investment Company
Act of 1940 as of May 30, 1997 and for the period from November 29, 1996
through May 30, 1997 is fairly stated, in all material respects.
This report is intended solely for the information and use of management of
the ARCH Fund, Inc. and the Securities and Exchange Commission and should
not be used for any other purpose.
/s/ KPMG PEAT MARWICK LLP
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KPMG Peat Marwick LLP
Columbus, Ohio
August 27, 1997
June 16, 1997
Management Statement Regarding Compliance with Certain Provisions of the
Investment Company Act of 1940
We, as members of management of The ARCH Fund, Inc. (the Funds), are
responsible for complying with the requirements of subsections (b) and
(c) of Rule 17f-2, "Custody of Investments by Registered Investment
Companies," of the Investment Company Act of 1940. We are also responsible
for establishing and maintaining effective internal controls over
compliance with Rule 17f-2 requirements. We have performed an evaluation
of the Funds' compliance with the requirements of subsections (b) and (c)
of Rule 17f-2 as of May 30, 1997.
Based on this evaluation, we assert that the Funds were in compliance with
the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of May 30, 1997 and for the period from November 29,
1996 through May 30, 1997, with respect to securities reflected in the
investment accounts of the Funds.
Sincerely,
/s/ WALTER B. GRIMM
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Walter B. Grimm
Assistant Secretary
