DTCC is nearing its goal of developing, by June, a more efficient, streamlined method for fund companies to enter and maintain information on their securities and for broker/dealers and other intermediary firms to obtain the data with ease.

The full-scale project involves redesigning Mutual Fund Profile Service’s (Profile) Security Issue database, a repository for a broad range of fund information, including investment objectives, fee schedules, investment requirements, breakpoint schedules and linkage rules, and other data related to fund securities. Profile is provided by DTCC’s National Securities Clearing Corporation subsidiary.

Laura S. Stanley, vice president, AIM Investment Services, Inc., is a member of an industry committee working with DTCC on this initiative. "The redesign of Profile will benefit AIM tremendously," she said. "Our ability to enter once and apply data common to all funds within the same class, or all funds within a portfolio, will result in the elimination of repetitious data entry. It also will streamline our quality-control process, as the data must be validated only once.

"Being able to review the fields and redefine the data values is also very beneficial to us and the broker/dealer community. And reaching consensus on the definitions of field values will help ensure common understanding and use of the values across fund complexes."

The right time

Since Profile was introduced in 1999, there have been dramatic changes not only in the development of new technology, but also in the industry’s information requirements, explained DTCC’s Ann Bergin, managing director and general manager, Distribution Services. After it was brought to the industry’s attention by the Joint NASD/Industry Task Force on Breakpoints, funds and firms began to recognize the benefits of a centralized repository for a broad range of essential information about individual funds. It was an opportune time to complete a full analysis of the database and develop a plan to make it much more comprehensive and resilient," she said.

A phased rollout

Working collaboratively with a steering committee comprising fund and broker/dealer members of the Investment Company Institute, DTCC has completed phase one of the project. The group finalized the functional and technical specifications, and examined each data field to determine if it should remain, be eliminated or be redefined.

A major part of the effort was developing a data dictionary of approximately 200 business definitions. The dictionary lists and defines all the data fields in the database, which are needed by firms for operational processing and to comply with fund prospectus and distribution policies; and it will be formatted so that users can cross-reference data fields to their business definitions.

Product Management Director Rita Gribben, Mutual Fund Services, explained that the current structure of the database is cumbersome. "To a large extent, it wasn’t being used. Replacing the old technology with a hierarchical model will now allow information to flow from one level to the others."

The new architecture will contain information at the management company, share class, fund portfolio and security identification levels.

• At the management company level, the management company is identified by its NSCC member number.
• This is followed by share class levels– Class A or B, for example.
• The next level contains information on the various fund portfolios offered by the management company, and each of these portfolios could have multiple share classes.
• The final level contains specific security identifiers for each portfolio.For example, a code for a Rights of Accumulation (ROA) calculation can be entered once at the management company level and be applied to each security at the ID level that has the same ROA calculation. Updates can be handled the same way.

The next step for DTCC is converting existing data from the current format. Two separate groups will be convening to discuss issues surrounding the migration and to coordinate a schedule for the various steps involved, including a "scrubbing" timeframe and a data-review period.

Other activities include developing a new front-end interface for DTCC WebDirect (formerly PCWeb Direct), which will simplify data entry, and producing a set of best practices for using the new Security Issue database.