SEC Company Response from STI CLASSIC FUNDS (CIK 0000883939) — Nov 9, 2004
STI CLASSIC FUNDS (CIK 0000883939)
Date: Nov. 9, 2004 · CIK: 0000883939 · Accession: 0000950152-04-008126
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<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>l10480acorresp.txt
<DESCRIPTION>SEC CORRESPONDENCE
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STI Classic Funds
3435 Stelzer Road
Columbus, Ohio 43219
November 9, 2004
Via EDGAR Correspondence & Regular Mail
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U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549-0901
Attention: Mr. Jeff W. Long, Accountant
Office of Disclosure & Review
Dear Mr. Long:
On October 7, 2004, we received comments from you via a conference call
(the "Comments") regarding the Form N-CSR filed by the STI Classic Funds (the
"Funds") for the fiscal year ended May 31, 2004.
You did not request the Funds to file an amended Form N-CSR, but rather
requested that written responses to the Comments be filed via EDGAR
correspondence within thirty days. This letter is intended to respond to the
Comments on behalf of the Funds and makes reference to sections of the Funds'
May 31, 2004 annual report as filed via EDGAR with the Securities and Exchange
Commission (the "SEC") on August 9, 2004.
To assist you with your review, we have preceded each of our responses with the
relevant Comment.
COMMENT 1: ON THE SCHEDULE OF INVESTMENTS FOR THE INTERNATIONAL EQUITY INDEX
FUND, THE RIGHTS WERE NOT FOOTNOTED AS BEING NON-INCOME PRODUCING.
Response:
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Management agrees with this comment. This information will be incorporated into
all future Form N-CSR and Form N-Q filings, as appropriate.
COMMENT 2: ON THE STATEMENT OF NET ASSETS FOR SEVERAL OF THE FUNDS, THERE WAS
EITHER A RECEIVABLE FROM AFFILIATED FUNDS OR A PAYABLE TO AFFILIATED FUNDS.
PLEASE EXPLAIN WHAT THIS REPRESENTS FOR ANY APPLICABLE FUNDS.
Response:
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During the period, certain expenses specifically attributable to Aggressive
Growth Stock Fund, Emerging Growth Stock Fund, Strategic Quantitative Equity
Fund, Institutional High Quality Bond Fund, and Institutional Total Return Bond
Fund were erroneously allocated and paid by all of the STI Classic Funds. This
allocation issue was discovered after period end, but prior to the issuance of
the financial statements. As a result, adjusting entries were recorded on the
financial statements to reflect the cash movements that occurred between the
Funds to correct the allocation problem. {The allocation issue did not result in
an
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NAV misstatement. Appropriate controls and procedures have been put into
place to prevent this type of issue from reoccurring.}
COMMENT 3: PLEASE EXPLAIN WHY THERE IS A PAYABLE TO ADVISER ON THE STATEMENT OF
NET ASSETS (STATEMENT OF ASSETS & LIABILITIES) FOR THE CLASSIC INSTITUTIONAL
U.S. GOVERNMENT SECURITIES MONEY MARKET FUND AND THE CLASSIC INSTITUTIONAL U.S.
TREASURY SECURITIES MONEY MARKET FUND WHEN THEY ARE WAIVING ADVISORY FEES.
Response:
As reported in the Notes to Financial Statements, the Adviser had agreed to
voluntarily waive a portion of its fee during the period. The waived amount
presented on the Statements of Operations is the cumulative amount waived by the
Adviser during the year. The payable reported represents the net advisory fee
payable at the end of the period, after voluntary waivers.
COMMENT 4: PLEASE EXPLAIN WHY THE SUBSCRIPTIONS AND REDEMPTIONS IN THE
INTERNATIONAL EQUITY FUND (CLASS A) AND THE INFORMATION & TECHNOLOGY FUND (CLASS
A) ARE SO LARGE IN COMPARISON TO THE NET ASSETS OF THE FUND (CLASS).
Management believes that the level of subscriptions and redemptions was
unusually large because of excessive trading by certain accounts. During the
period, the Funds' market timing monitoring process detected frequent trading
activity for a certain dealer. When the activity was detected, the Funds placed
trading restrictions on the accounts suspected of engaging in market timing
(i.e., the accounts were closed to future purchases), as permitted in the Funds'
current prospectus. The Funds will continue to monitor for, and take appropriate
action to stop, market timing activity.
COMMENT 5: ITEM #2 OF THE FORM N-CSR REGARDING THE CODE OF ETHICS. PLEASE
REPRESENT WHETHER THERE WERE ANY WAIVERS AND/OR AMENDMENTS TO THE CODE.
There were no waivers granted, nor amendments made to the Principal Officer Code
of Ethics during the period ended May 31, 2004. The instructions to Form N-CSR
Item 2 require a registrant to describe any waivers or amendments to the Code,
but do not specifically require the disclosure of the absence of waivers and/or
amendments. However, the Funds will incorporate such a disclosure in future
filings of Form N-CSR.
In connection with the Comments, our response thereto, and all future filings of
Form N-CSR and Form N-Q, as appropriate, management of the Funds acknowledges
that:
- the Funds are responsible for the adequacy and accuracy of the
disclosure in the filings;
- comments from the staff of the SEC (the "Staff") or changes to
disclosure in response to Staff comments in the filings reviewed by the
Staff do not foreclose the SEC from taking any action with respect to
the filing; and
- the Funds may not assert Staff comments as a defense in any proceeding
initiated by the SEC or any person under the federal securities
laws of the United States.
We trust that this information is responsive to your request. Please contact the
undersigned at (614) 470-8071 with any questions.
Respectfully submitted,
/s/ Bryan Haft
Bryan Haft
Treasurer, STI Classic Funds
cc: Richard W. Grant, Esq.
Morgan, Lewis & Bockius LLP
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