ADP Brokerage Services Group says it has enhanced its Mutual Fund Routing System (MFRS) to include the systematic calculation of Rights of Accumulation and the application of the appropriate breakpoint on mutual fund orders.
ADP’s investment in breakpoint functionality helps clients remain compliant with the requirements put forth by the National Association for Securities Dealers, New York Stock Exchange and the Securities Exchange Commission. The “Rights of Accumulation” feature within mutual fund processing refers to a programme offered by many mutual fund companies that enables shareholders to receive a discount on the purchase of front-end loaded funds.
The Rights of Accumulation privilege allows investors to add the value of any shares of the funds owned by them or their family members to the amount of their next mutual fund purchase, for the purpose of calculating the sales charge. This can benefit the investor, as the accumulated amount may help to meet or exceed a “breakpoint”, a level of investment at which the sales charge is reduced; by paying a lower sales charge, the investor can put more of their money to work immediately.
ADP’s new Rights of Accumulation functionality provides an automated mechanism for aggregating customer assets, both held at the firm and elsewhere, to ensure that the proper sales charge is applied. With on-line access to fund family load schedules, the broker can also run ‘what if’ scenarios and provide complete disclosure of the charges before the order is entered.
“The enhancement of MFRS to include automated ROA processing provides brokers with information they need to determine the best investment for their customer and to provide full disclosure of the sales charges associated with the transaction,” says Marianne Brown, Senior Vice President and General Manager of ADP Brokerage Processing Services. “It is just another example of ADP’s dedication to providing our clients with the tools they need to achieve their business goals.”
ADP’s Brokerage Processing Service (BPS) supports real-time processing of North American equities, options, mutual funds and fixed-income securities. BPS handles everything from order management to clearance and settlement, regulatory reporting and other back office requirements.