Jun 03, 2013 • DTCC Connection

Mutual Fund Profile Service II Enhances Data Accuracy For Fund Industry

By Karen Gregory

On May 20, DTCC launched significant enhancements to the Security Issue database of Mutual Fund Profile Service II with the introduction of a web-based data extraction, comparison and validation feature that provides a new level of data accuracy to the fund distribution community. Previously, industry participants relied on manually entered data which was labor-intensive and prone to delays when there were changes to the data. To build accuracy and confidence in the data, we created the Comparison Tool which will give distribution firms quicker access to a fuller and more precise profile of information,” said Josephine Torelli, DTCC Vice President, Wealth Management Services.

Mutual Fund Profile Service II

Through Profile’s new Comparison Tool, DTCC can integrate data from multiple sources, as well as mine and identify relationships between data elements in a way that has never been easier. And new fields have been designed to capture necessary data to support new regulatory requirements of the Employee Retirement Income Security Act.

How it works

By pulling data associated with mutual funds from source documents in the Securities & Exchange Commission’s (SEC) EDGAR database – such as prospectuses, Statements of Additional Information and other amendments – Profile’s Comparison Tool automatically compares the information to what is already in the Security Issue database, flags discrepancies and sends daily email alerts to fund companies regarding those discrepancies.

Fund companies can then approve corrections by simply clicking on an “update” arrow – or leave the data as is and add comments explaining why there are acceptable variances. This last characteristic, called the “annotations” feature, further improves the integrity and transparency of processing between fund and distributor partners.

Industry response

According to Marty Burns, Senior Director, Operations and Distribution, at the Investment Company Institute, “Profile’s Comparison Tool will give the industry confidence that the information in the database is consistent with the information that’s disclosed in current fund prospectuses and Statements of Additional Information. The Tool’s annotations feature also captures important fund details distributors need for executing trades. These enhancements are exactly what the industry has been seeking for some time.”

For fund companies, the addition of this new automated tool in Profile’s Security Issue database means a streamlined process. “I believe it will become the ultimate indicator of data quality that intermediaries have sought for a long time,” said Laura Stanley, Vice President, Invesco Investment Services, Inc. “The Comparison Tool will eliminate the need for separate requests from intermediaries for fund data, removing the risk of misinterpretation which exists with firm questionnaires today. And, it gives funds standardized third-party assessments of our data.”

“Using the tool to extract data provided to the SEC and comparing it against what funds have entered into the database is revolutionary,” explained DTCC Consultant Ira Cohen. “Not only is it easy to view, funds can also take appropriate and immediate action on these items by correcting the database, their documents, or annotating differences with explanations.”

More information about Profile

At present, the Security Issue database captures data for approximately 22,000 CUSIPs and contains information separated into a total of 230 fields, which include the 180 data points sourced from EDGAR.

Mutual Fund Profile Service II was introduced 16 years ago and since its outset has continually evolved with market changes and participant needs. It is a repository of databases that allow funds, broker/dealers and other distribution firms to automate and streamline the exchange of accurate and timely information on the NSCC pro-cessing capabilities of funds and firms, as well as fund distribution data, such as record, reinvestment and payable dates for dividend, capital gains and commission payments.

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