A major initiative between DTCC and the mutual fund industry to develop a solution for disseminating information about fund securities will culminate in September with the launch of the new Mutual Fund Profile Service (Profile).

DTCC’s NSCC subsidiary, with support from the Investment Company Institute (ICI), conducted a comprehensive two-year reengineering of the service to transform it into a central, automated industry source for rules-based processing that can be used by the entire fund community.

“We redesigned Profile to give fund companies and their business partners greater operational flexibility, as well as a medium that will allow them to more easily expand their funds’ distribution,” said Ann Bergin, managing director and general manager, DTCC Wealth Management Services. “By creating a database that funds can easily populate and update, distributors can then access the most current and valid information available on fund securities.”

Information in the database includes investment objectives, fee schedules, breakpoint schedules and linkage rules, and other governing rules of a fund.

One-time data entry

The design is driven by a hierarchy structure in which information entered on one level will automatically flow to other levels that should contain the same information. This relationship eliminates the need for time-consuming, repetitive data entry and reduces the risk of errors. In addition, because all data fields are now required, firms will receive more relevant information from the funds about their products, which, in turn, will allow them to offer more comprehensive advice to their customers.

Chris Silge, vice president, Dealer Services, Goldman Sachs Asset Management, who is chair of the ICI Profile Steering Committee, said, “The committee believes the industry will find the new Profile convenient, efficient and easy to use, and that it will be successful in communicating thorough prospectus and operational information to fund distributors – and, as a result, better serve their clients.”

Final Stage

During the final phase of the redesign, which ran from June 3 through September 13, the organization gave fund companies access to the new database so they could review, scrub and update their data to ensure that it was accurate and current when the database was launched.

More to come

Interest in Profile has been growing since the Joint NASD/Industry Task Force on Breakpoints issued its report and singled out the service for its ability to help identify and apply breakpoint discounts. However, according to Bergin, the database was functioning on ten-year-old technology that was not terribly adaptable. “We saw the benefits to the industry of making it fully functional with the potential of expanding its capabilities in the future,” she explained.

Silge noted that while further changes to Profile could have been made, “It was more important to draw a line in the sand and release it to the investment community as soon as possible so they can begin to use the data consistently and streamline the process on their systems.”

Bergin said that after the official launch in September, NSCC and the ICI committee will continue to respond to feedback from funds and firms and discuss enhancements that can provide additional benefits to the industry.

FINRA (NASD) Link

In 2005, The Financial Industry Regulatory Authority – formerly NASD – developed a link to Profile that allows the organization to draw information on breakpoint schedules and linkage rules, repopulate it within its own Web site, and provide that information to its members and to investors. This link will continue after Profile is launched in September.

What Customers Have To Say

Chris Horgan,
Fidelity Investments

The redesigned database creates a powerful solution that funds can employ to communicate fund security administration, policy and prospectus rules. In addition, it creates an indispensable tool which firms can utilize in operations processing to fulfill compliance requirements. Profile is the new paradigm for fund processing and compliance information.”
– Chris Horgan, business analyst, Fidelity Investments Institutional Services Company

Profile’s relational database significantly reduces data entry and maintenance requirements for fund families, while providing better data integrity for firms. It’s not often a major initiative has such clear benefits to all parties involved.”
– Jeff Naylor, vice president, Investar*ONE Distribution Services for SunGard

The Profile Steering Committee spent a great deal of time redefining fields and ensuring the data values were accurate and complete. This occurred for each field in the new database and should result in more relevant data choices for funds and more consistent interpretation of the data by firms.”
– Laura Stanley, vice president, AIM Investments

Valerie Kay, Raymond
James & Associates

The Profile redesign offers funds a tool to consistently and efficiently communicate critical product information. It also gives firms offering these funds automated real-time information required to accurately process transactions. A few years from now, we’ll look back and wonder how we got by for so long without it. In the ‘product’ world, it would be the equivalent to us trying to do business without Fund/SERV and Networking. It’s an exciting change and one that should benefit everyone – ultimately and most importantly, the mutual fund investor.”

– Valerie Kay, assistant vice president, Mutual Fund Operations, Raymond James & Associates Inc.