DTCC’s Managed Account Solution Gears Up for Launch
by Christopher Manso
for global strategy, SunGard
Transaction Network
The industry’s push to automate managed accounts processing is picking up speed as DTCC prepares to launch its new Managed Accounts Service later this year. In July, the service expanded its customer base with the signing of SEI and SunGard Transaction Network, two major outsourcers in this rapidly growing market.
The Managed Accounts Service will bring much-needed efficiency to this industry segment, providing one central communications network and a standard set of messages. “Automating and standardizing the data flow among counterparties to these transactions will help our customers increase operational efficiencies, reduce trade-related costs and risk, and stimulate growth, which ultimately benefits their investor clients,” said Ann Bergin, DTCC managing director and general manager, Wealth Management Services.
New customers weigh in
Currently, the account information that flows between investment managers, sponsoring broker/dealers and service providers is typically exchanged by phone, fax and paper. The Managed Accounts Service will automate those communications, allowing a seamless flow of information to multiple trading parties through a single connection to a central platform.
What Is the Managed Accounts Service?
DTCC’s Managed Accounts Service will create a more efficient and secure process for sharing data required to open and support managed accounts. Most messages are transmitted from the managed account sponsor to asset managers that are hand-picked by the sponsor to invest and manage an investor’s funds.
Depending on the size and complexity of an investor’s account, more than a dozen asset managers can be involved and communicating back and forth with the sponsor. And that’s for a single account. “Multiply that by thousands of accounts, and the complexities of the communication between managers and sponsors can become a real burden,” said Ann Bergin, DTCC managing director and general manager, Wealth Management Services. “That’s the value of one central communications platform. We transform a complex web of communications into one streamlined process through a single gateway. The resulting efficiencies reduce operational costs and risk, and allow managers to better serve the investor client.”
“SunGard is pleased to be participating with DTCC on this important initiative,” said Mark Volker, senior vice president for global strategy for the SunGard Transaction Network (STN). “STN has been a consistent proponent of open industry standards that support end-to-end trade automation and expects this initiative to help its customers support growth, streamline processing and mitigate risk.”
STN will transmit messages from its client counterparties to the Managed Accounts Service through a central connection point. Connectivity to DTCC will allow SunGard customers to seamlessly integrate with the Managed Accounts Service and facilitate rapid adoption of industry standards.
SEI anticipates similar benefits. “Our goal is to create and adopt innovations that will increase efficiencies and standardization for our SMA [separately managed account] operations and our clients, and this service clearly falls in that category,” said Phil McCabe, managing director of SEI’s Investment Manager Services division.
Getting on board
At present, six investment manager firms are working in the service’s test environment, along with four outsourcers and nine vendors. And interest in the new service has accelerated following a June conference on managed account solutions sponsored by DTCC and the Money Management Institute.
At that event, more than 130 sponsors, asset managers and vendors heard directly from early adopters, including those working in the service’s test environment. “Feedback we received from people at the conference made it clear they have moved beyond a wait-and-see approach,” said Bergin. “They see the progress and they want to be a part of it.” @