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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
Investment 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: Date examination completed
811-3567 11/30/98
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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 representation statement:
The Arch Fund, Inc.
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4. Address of principal executive office (number, street, city, state, zip code):
3435 Stelzer Road, Columbus, OH 43219-8001
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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 November 30, 1998, 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 November 30, 1998, and with respect to agreement of security
purchases and sales, for the period from September 30, 1998 (the date of our
last examination) through November 30, 1998.
1. Confirmation of all securities held by Mercantile Bank in book entry
form;
2. Verification of all securities purchased/sold but not received/delivered
and securities in transit via examination of underlying trade ticket or
broker confirmation;
3. Reconciliation of all such securities to the books and records of the
Funds and Mercantile Bank;
4. Confirmation of all repurchase agreements with brokers/banks and
agreement of underlying collateral with Mercantile Bank records; and
5. Agreement of twelve selected security purchases, sales or maturities
since our last report from the books and records of the Funds to trade
tickets or 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 requirements of subsections (b) and (c) of Rule 17f-2 of the Investment
Company Act of 1940 as of November 30, 1998, with respect to securities
reflected in the investment account of the Funds 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.
KPMG LLP
Columbus, Ohio
January 20, 1999
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January 20, 1999
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 November 30, 1998.
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 November 30, 1998 and for the period from September 30, 1998
through November 30, 1998, with respect to securities reflected in the
investment accounts of the Funds.
Sincerely,
/s/ Walter B. Grimm
Walter B. Grimm
Assistant Secretary
The ARCH Fund, Inc.
