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DTCC Helps Mutual Funds Industry Standardize Communication of Distributions

By Kasi Martin | Aug 16, 2018

Webinar Helps Mutual Funds Industry Standardize Dividend and Capital Gains Distributions

In June, DTCC hosted a webinar for clients to address the challenges of processing dividend and capital gains distributions.

The webinar featured a panel of industry experts from a broad cross-section of funds and firms who are part of a DTCC task force. They provided an overview of their efforts, key deliverables, DTCC’s resource offerings and how the industry can leverage them to their advantage.

“In recent years, the increased complexity of investment products offered, in conjunction with the growth in omnibus and retirement plan accounts, has heighted the importance of timely and accurate mutual fund distribution data,” said John Saxenian, DTCC Director, Product Management, “Today, more than ever, funds and firms face mounting pressures to be consistent and timely in their communications.”

In 2015, an industry task force consisting of the ICI Bank, Trust & Retirement Advisory Committee (BTRAC) and Broker Dealer Advisory Committee (BDAC) was assembled to raise awareness of the challenges, identify opportunities and promote DTCC solutions that help the industry standardize the communication of distributions.

Overheard during the panel discussion:

“We often receive ‘special distributions’ mistakenly categorized as a ‘capital gains.’ Last December alone, we reconciled 100,000 of these payments. When we begin to multiply the inconsistences and manual processes, it impacts our ability to serve our clients. That’s why getting everyone on the same page with best practices is so important to promote consistency."

“We use DTCC’s best practices to ensure we are following the same processes as our firms. It makes everything faster and more efficient for all parties. And the dividend template helps us reduce our call outs and research.”

Recently, the task forced published two critical resources to support timely and consistent communications and help funds and firms harmonize otherwise disparate processes: a comprehensive Best Practices document and a Dividend and Capital Gains Distribution Calendar in multiple formats for funds submitting projected periodic distribution information.


Highlights of the Best Practices document

A comprehensive industry guide to streamlining and standardizing the communication of distribution information, the document provides clients with best practices on:

  • Utilizing DTCC’s MFPS I and MSPS II services to transmit information between counterparties
  • Communicating changes and corrections
  • Applying standard terminology
  • Increasing accuracy, timeliness and consistency

Watch the full webinar.

Contact a Relationship Manager at +1-212-855-8877 to learn more.



 

 

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