PFPC is offering a Rule 22c-2 compliance service for mutual fund companies. It consists of a eb-based monitoring tool with direct access to more than 50 million broker/dealer and 43 million retirement sub-accounts. PFPC says it will help mutual fund managers monitor market timing.
PFPC’s 22c-2 service offers a Web interface, an analytics engine, contract management, data warehousing and request monitoring through a secure portal. These capabilities, combined with direct access to data, will establish an economy of scale that helps reduce the expenses associated with obtaining intermediary data, says PFPC.
Designed for both PFPC clients and as a stand-alone product, it will be available prior to the October 2006 deadline set by the Securities and Exchange Commission (SEC) for compliance with Rule 22c-2.
“As a recognized leading provider of shareholder services and the industry’s largest provider of sub-accounting services, the marketplace is looking to us to provide an innovative approach to complying with 22c-2. We are already in implementation discussions with many fund companies,” says Michael DeNofrio, PFPC executive vice president and senior managing director, transfer agency. “PFPC’s PR3 file is considered by many to be the industry-standard for delivering broker/dealer subaccounting data. This expertise led us to develop a robust solution that will embrace a risk-based approach to monitoring market timing.”
PFPC is distributing the service over the SunGard Transaction Network (STN), linking it to thousands of financial intermediaries and fund companies.
“By integrating PFPC’s and STN’s 22c-2 technology and connectivity throughout the industry, our collective 22c-2 solution becomes a much richer source of intermediary data for PFPC Launches Integrated 22c-2 Solution That Will Offer Direct Access to Over 90 Million Account fund providers,” says Marty Burns, vice president, SunGard Transaction Network. “This scale helps bring a more powerful end-to-end solution to customers to help them identify and prevent market timing.”
Rule 22c-2 is intended to prevent short-term trading and market timing by requiring mutual fund companies to establish agreements compelling intermediaries to provide funds with underlying shareholder trading information so funds can monitor and enforce their market timing policies.
The PFPC Rule 22c-2 services includes an analytics engine to identify suspicious activity in omnibus positions; access to data; queries through a Web-based interface; data aggregation from multiple sources; tracking and disposition of market timer exception transactions; a market timer audit trail and results storage mechanism; data interpretation based on fund specific rules; secure transmission and storage of data; and a hosted service model.