With the introduction of Rule 22c-2 on the horizon, BISYS Fund Services has developed a five-part product, packaged as one full-service solution, to help fund companies meet the SEC's requirements by the anticipated compliance deadline of October 16. After privately pitching the service to existing clients, the outsourcing provider publicly launched it this week with a press release and presentation to members of the media.

"There's a significant amount of work that's going to get spread throughout the industry with the introduction of 22c-2," said Dana Donohue, executive vice president for operations, during the presentation on Tuesday. Though a failure to meet the deadline would prevent a fund company accepting trades from intermediaries -- and thus prove seriously detrimental -- many companies are still far from ready for implementation, he said. He estimates that companies will need to begin work by mid-June in order to be ready by mid-October.

While some outsourcing firms are offering fund companies the tools to collect necessary information from intermediaries, such solutions still leave the fund companies to provide their own staffing, Donohue explained. The BISYS offering encompasses execution as well as technology, promising to:

Negotiate agreements with intermediaries on behalf of the fund

Monitor trades for market timing

Administer redemption fees where appropriate

Manage communications between intermediaries and funds

Report back to intermediaries

"What we're really talking about doing here is becoming the arms and legs of the fund," said Donohue.

BISYS has begun hiring additional staff to support the new service, and the firm's executive team believes it is prepared for the challenge of getting clients ready for October, having begun work on the solution in July 2005. Yet the task is large: "We have about 6,000 dealer agreements across our client universe that will need to be renegotiated," said Bruce Treff, executive vice president and general counsel.  

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE