Investment Clubs

[ September 26, 2000 ]

The ProShare Manual

By Mark Goodson (TMFFatBlokeMarge)

Well, well, you go away on holiday and what happens?

The normally quiet Investment Clubs board goes berserk, mainly with a thread about the ProShare manual. For those who didn't see it, it was started by ianhaines, who asked if there were two different ProShare manuals.

The discussion was going along quite nicely, when frontsys had to audacity to mention that he had made 20 copies of the manual to distribute amongst the members!

Suddenly, all hell broke loose! (Well, not exactly, but relatively speaking if you consider the general friendly and sedate activity on the Investment Clubs board).

The issue seemed to be that ProShare is a non profit-making organisation, so that copying the manual should be the number 1 "Don't do this" rule. Despite Jamescon actually quoting from the manual (exactly what I would have done if I had not been away -- well done James) the argument still raged as to whether any copyright was being broken or not.

So, for all clubbers, would-be clubbers, and anyone else who happens to be interested, here is the official view.

When I started H&G, I sent off for the manual and paid for it myself. POINT TO NOTE: AT THIS TIME, THE CLUB WAS NOT IN EXISTENCE BUT WAS MERELY AN IDEA!

I wanted to explain to my friends how a club worked, but couldn't really do so any clearer than the manual did. After all, if they could understand the mechanics of the club, then they might be more likely to join. So I contacted ProShare and asked for permission to copy the rules and constitution to send to my fellow prospective members. They were quite happy to give this.

As a result, H&G was born, and we elected to join ProShare. As I had already purchased the manual personally, the membership fee was reduced by this amount and the club bought the manual from me, thereby making it club property. As treasurer, I keep hold of the manual, which I have had to refer to occasionally, and all the members know where to find it.

Now, the point here is that the club pays the ProShare subscription, not the member. The club therefore gets 1 copy of the manual, and ProShare would not of course supply 1 copy per member in any event. However, despite the manual being subject to all the usual copyright laws, ProShare actually gives permission for "relevant pages and forms" to be copied "PROVIDING IT IS FOR THE USE OF THE CLUB AND ITS MEMBERS ONLY."

So, what is a relevant page? Any of them could be, to be honest. For ease, ProShare now supplies a complete copy on disk in the rear of the manual so that photocopying is unnecessary; you can just run the pages off using Microsoft Word.

As many of you know, H&G were heavily publicised in the late 1990s and consequently I have worked quite closely with ProShare, even speaking at one of their workshops at the Investors Chronicle EXPO 99 at Olympia last September. I have spoken to them on many occasions about the rules and constitution, and once, when I was supposed to be giving a talk to a Rotary Club about setting up an investment club, they even offered to reproduce multiple copies of large sections of the manual for me to hand to prospective members. So, I think that I can safely say that ProShare would of course agree that any club could happily reproduce all or any of the pages as long as the members of that club were the recipients and it was only to be used for that club's business. This saves the even greater cost (to them) of making sure that all club members have a copy, when it is the club's (and not the individual's) subscription.

What is of course unacceptable is to use those copied rules to set up another club which does not subsequently join ProShare! This, I suppose, is bound to happen occasionally, although, for the record, both subsequent "offshoot" clubs that I have started, The Brass Monkeys and The Dirty Harrys, are members of ProShare, as will be any other future H&G family member club that operates similar rules. It is an organisation that supports and promotes share ownership in the UK, and without them, many clubs would simply not exist.

So, I hope this clarifies the situation. Copying the pages of the manual for the members of the club that owns the manual is perfectly acceptable.

The final question then, is should a departing member hand back his rules and constitution so as not to break any copyright laws? The answer is probably yes, but do you think ProShare would be that bothered? I don't, unless of course the member concerned adopts those rules as his own work and subsequently sells them on to interested parties. But how likely is that?

We all know what's right and wrong. Use for the manual for what it was intended for, and if you want the members to have a copy each, then that's OK.

Where Next?

• Investment Clubs discussion board
• The Fool's Guide to Investment Clubs
• Fool Books -- The Fool's Guide to Investment Clubs