The Depository Trust & Clearing Corporation (DTCC) makes changes in its rules. The process of managing mutual funds that are part of an investor’s managed account portfolio, will be simplified by a direct access to Fund/SERV and other Mutual Fund Services.
Fund/SERV enables managers to automate, centralise and standardise purchases, exchanges and redemptions. Before investment managers had to process fund orders through a third party, typically their company’s mutual fund unit or the sponsor broker/dealer. Information would then have to be communicated back to the investment manager, a process that has been complicated and prone to errors.
Using Fund/SERV and other Mutual Fund Services, which are provided by DTCC’s National Securities Clearing Corporation (NSCC) subsidiary, investment managers will become limited members of NSCC (as Investment Manager/Agent Member). Money settlement for the transactions will be handled by a full member of NSCC, generally either the manager’s mutual fund unit or the sponsor broker/dealer.
Streamlining fund processing for investment managers is an example of how we support the evolving needs of our customers and then look to leverage our infrastructure to increase efficiencies, says Ann Bergin, managing director and general manager, DTCC Wealth Management Services.DTCC’s Managed Accounts Service has witnessed significant growth recently. DTCC’s charter members, Citi’s Smith Barney and GTS business units, are currently in full production; UBS is planning to implement MAS early next year, and other sponsors and investment managers will be announcing activation plans in the near future.
DTCC has created a solution that will be particularly useful within the fixed-income managed accounts space, says Anne Kruczek, senior vice president and head of Administration and Operations, Federated Investors, Inc. Pooled investment vehicles are the premier choice within the traditional fixed-income managed account portfolio as they offer increased ability to control diversification and risk management of the portfolio at lower managed account minimums. Connectivity will simplify the trading of these investments and increase efficiency for both investment managers and sponsors.”
Federated Investors, Inc. is a firm has provided customized separate account management since 1973, manages $24.5 billion in fixed-income assets.
L.D.