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The Check Clearing for the 21st Century Act (the Check 21 Act) took effect October 28, 2004. This legislation permits anyone in the check collection system to convert an original check into a "substitute check" and deposit, present or send the substitute check for collection, instead of the original check. The Check 21 Act is intended to speed up the collection of checks and to prepare the system for electronic check processing, without at this time requiring banks to receive checks electronically. The effect on mutual funds' substitute checks will be adverse. The Check 21 Act is a step toward electronic check processing. The transition is bound to be bumpy and both consumers and businesses who write and receive checks should prepare for this change in the check processing and collection system. Mutual funds will want to review their agreements with their transfer agents or service providers who receive and inspect investment checks.