Fund/SERV® Sets Volume Record at Mid-Year
Reliance Trust Company
From January 1 through June 30, 2007, the total number of transactions, which include purchases, redemptions and exchanges, increased 19 percent over the previous year, reaching a total of 85.1 million valued at $1.2 trillion; this is compared to the 71.4 million transactions valued at $1.1 trillion during the same time period in 2006. Daily average transactions at June 30, 2007, grew to 690,000 valued at $10 billion, compared to just under 579,000 valued at $8.7 billion the previous year.
“Mutual fund assets under management in the U.S. reached almost $11.4 trillion in June, and these investments continue to grow as investment companies and households increase the number of fund holdings in their portfolios,” explained Ann Bergin, DTCC’s managing director and general manager, Wealth Management Services. “Fund/SERV has the capacity to support this growth and handle it smoothly and reliably.”
Launched in 1986, Fund/SERV is used by nearly 1,100 fund companies, broker/dealers, banks and other intermediary firms. The fee is currently 11 cents per transaction (a reduction from the previous 17.5 cents); it went into effect in January 2006. As a member-owned organization, DTCC and its subsidiaries operate on an at-cost basis, charging transaction fees for services, reducing them as volumes grow and returning excess revenue to its members.
What Fund/SERV supports
The types of fund transactions processed through Fund/SERV have grown over the years. Originally created for 1940 Act Funds, the service has been expanded to include retirement-program transactions – 401(k) and 403(b) plans, for example – as well as pooled investment products such as bank collective investment trusts, stable value funds, separate accounts and Section 529 Qualified State Tuition Programs.
Retirement-program transactions through NSCC’s Defined Contribution Clearance & Settlement (DCC&S) service now account for 35 percent of Fund/SERV’s total volume, up from 28 percent at year-end 2006.
Reliance Trust Company, one of the largest – and earliest – users of DCC&S processed close to two million retirement-program transactions last year. “Reliance supports both two-party and tri-party trading models, and the service works extremely well for us,” explained Sharon Ennis, Reliance’s Senior Vice President and Director of Development. “It’s allowed us to expand our service reach in the industry.”
The firm is an institutional provider of custodial and trustee services to the retirement-plan industry, including some of the largest plan recordkeepers in this space.
