New Profile Database Makes Life Easier for Mutual Fund Industry
Barbara Simon
Rita Gribben
The mutual fund industry now has its first-ever centralized source for rules-based processing and information in Mutual Fund Profile Service, which was launched last September after a major reengineering.
The service is providing the industry with a solution to a longstanding challenge: how – from a central point – to easily disseminate vital information about fund securities to broker/dealers, banks and other intermediaries, and how to update that information in a way that streamlines the process for fund companies.
The new Profile database is structured on a hierarchical model. Information entered at one level flows automatically to other levels that should contain the same information, thereby reducing data entry and maintenance requirements. The structure begins at the Management Company level and continues logically through Share Class, Portfolio and Security Identifier levels.
New functionality
Even before 2007 had ended, DTCC had integrated into the service several new functions that allow funds to update and delete share classes, fund portfolios and security issue identifiers. For instance, as a precaution, Profile shows a “warning” message on Web screens before a fund company can delete any share class name or fund portfolio name. “This feature gives funds a greater understanding of the global impact that a change or delete action will have on their relational data,” said Rita Gribben, DTCC Director of Product Management.
More to come in 2008
“The work we’ve done is an important beginning, but there is much more we intend to do to tap into the value of this dynamic database,” said Ann Bergin, DTCC managing director and general manager, Wealth Management Services. “This will be a prime focus for us in 2008.”
Gribben and Barbara Simon, DTCC vice president, Product Development, are currently working with members of the Investment Company Institute’s Profile Steering Committee subgroup to map plans to further enhance the service in 2008. The group identified a list of upgrades, 20 of which will be addressed as Phase l enhancements, scheduled for mid-year delivery.
The scope of Phase I will include new reporting tools within the system to allow funds to cross-check the information they have entered and validate accuracy at the appropriate hierarchy levels. Other enhancements in development will further improve data accuracy and provide funds with broader auditing capabilities.
DTCC also plans to update several key documents – the Best Practices and DTCC WebDirect User Guides, the Technical Manual and the Data Dictionary. The dictionary lists and defines all the fields in the database; these are needed by firms for operational processing and to comply with fund prospectus and distribution policies.
“By expanding Profile’s flexibility to make it easier to populate and retrieve data and maintain the database, we can expand its usefulness as an operational, regulatory and compliance database tool,” Simon explained.
Another concept being developed is a warehouse where fund prospectuses would be centralized in a DTCC repository, similar to DTCC Deriv/SERV’s Trade Information Warehouse which contains the primary record of over-the-counter credit derivatives contract. Such a warehouse would house statements of additional information and other fund documents.
Bergin maintains that the practicality of using an existing system to meet the increasing information needs of the industry is compelling. “Everyone is looking to lower costs. At the same time, the pressure on the industry to become more transparent and to provide better service to clients is increasing. We are in a unique position to have grown our services over the years with direct input from the industry. We know what they need; our systems and connectivity are already in place; and we can deliver services at a cost lower than anyone else.” 