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Thursday, September 20, 2007

DTCC Updates Profile System for Easier Prospectus Access

News summary by MFWire's editors

The Depository Trust & Clearing Corporation has morphed its Mutual Fund Profile Service into a service that will allow investors easier access to fund prospectuses. The service will aggregate investment objectives, fee schedules and contingent-deferred sales charge and blue sky information, commission data, and more.


The Depository Trust & Clearing Corporation (DTCC) announced today that it launched a service on September 17 that will streamline the process of obtaining fund prospectus information and expand the scope of the service as a primary industry source for rules-based processing.

By completing a sweeping redesign of its Mutual Fund Profile Service (Profile), DTCC's National Securities Clearing Corporation (NSCC) subsidiary is providing the fund community with an automated, centralized repository for a broad range of reference information. This information includes investment objectives, fee schedules and contingent-deferred sales charge and blue sky information, commission data, and more.

"The launch went flawlessly, with more than 100 fund companies participating and information on over 15,000 securities converted to the new service, which represents 86% of the total securities on our old system," said Ann Bergin, managing director and general manager of DTCC's Wealth Management Services.

"We have successfully laid the foundation for a single, comprehensive database that will become increasingly beneficial to the industry as we expand its uses and leverage its capabilities," she added.

The new model created for Profile will eliminate repetitive data entry, streamline the quality-control process and increase reporting flexibility by fund companies and their distributor partners. "It essentially changes the way funds and firms process information, and it can also help strengthen their ability to meet compliance requirements," Bergin explained.

The design is based on a hierarchy of levels - management company, share class, fund portfolio and security identifier. Employing easy-to-use Web screens, funds can feed data into Profile at one level and automatically flow - or "relate" - the information to other relevant levels. This eliminates the need for repetitive, time-consuming data entry and reduces the risk of errors. Distributors will use the same screens to request and access information.

Chris Silge, vice president, Dealer Services, Goldman Sachs Asset Management, is chair of an Investment Company Institute (ICI) Profile Steering Committee that worked with DTCC to redesign Profile over a two-year period. "The committee believes the industry will find the 'new' Profile convenient, efficient and easy to use, and that it will be successful in communicating thorough prospectus and operational information to fund distributors and, as a result, better serve their clients," he said.

Silge noted that while further changes to Profile could have been made, "It was more important to draw a line in the sand and release it to the investment community as soon as possible so they can begin to use the data consistently and streamline the process on their systems."

Bergin said that after the official launch, DTCC and the ICI committee will continue to respond to feedback from funds and distributors and discuss further enhancements to Profile that can benefit the broad industry.

Interest in Profile has been growing since the Joint NASD/Industry Task Force on Breakpoints issued its report and singled out the service for its ability to help meet the challenge of identifying and applying breakpoint discounts. In 2005, NASD developed a link to Profile that allows NASD to draw information on breakpoint schedules and linkage rules, repopulate it within its own Web site, and provide that information to its members and investors.

About Wealth Management Services Wealth Management Services is a business unit of The Depository Trust & Clearing Corporation (DTCC) that provides transactional and information services to the mutual fund and managed accounts industries; it is also developing a new processing solution for alternative investment products, which will be launched pending approval from the Securities and Exchange Commission. Wealth Management Services automate, standardize and streamline the processing of transactions and data exchange between asset managers and their network of distribution partners, lowering risk, operational costs and errors.

About DTCC The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, settled more than $1.5 quadrillion in securities transactions last year. DTCC supports the post trade processing of equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments, over-the-counter derivatives, mutual funds and insurance transactions. DTCC's depository provides custody and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion. DTCC has operating facilities and data centers in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.  

Edited by: Erin Kello


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