Fees Realigned for Mutual Fund Services
New fees for Fund/SERV® and Mutual Fund Profile Service became effective January 4, 2010, following approvals by DTCC’s Board of Directors and the Securities and Exchange Commission. The changes realign the fees to better reflect shifts in marketplace volumes and trading practices.
“Over the years, tight financial management combined with growing volumes allowed us to make continual fee reductions that have saved the industry millions of dollars, while increasing operational efficiencies through enhancements and new services,” said Ann Bergin, managing director and general manager, Wealth Management Services.
“However, the mutual fund industry wasn’t immune to the realities of the economic crisis that hit almost every sector last year. Volumes have been flat, and the anticipated 5% increase did not materialize.”
Fee cuts for both Fund/SERV and Networking from 2005 to year-end 2009 represent savings to the industry of approximately $150 million.
As a result, the fee for a Fund/SERV transaction was increased one penny, from 5 cents to 6 cents. The fee for Networking, a companion service that exchanges and reconciles all customer account-level information between funds and distribution firms, remains unchanged at 10 cents for every 100 records.
Together, fee cuts for both Fund/SERV and Networking from 2005 to year-end 2009 represent savings to the industry of nearly $150 million.
Mutual Fund Profile Service, which comprises both the Daily Price & Rate File and the Security Issue, Participant and Distribution Databases, is being repriced.
Over the last 18 months, NSCC has transformed the Security Issue Database. Its architecture was reengineered; its capacity was expanded to accommodate a complex and extensive range of prospectus and operational rules-based data; and DTCC provided funds with numerous tools to help them input data and ensure its quality.
“This undertaking, completed on behalf of the funds industry, has automated and streamlined a highly inefficient – but indispensible – process of information exchange, the value of which becomes more apparent as we delve deeper into the industry’s needs and leverage Profile’s inherent capabilities,” Bergin added.
The fee for Profile, effective January 4, was adjusted to align with members’ usage. Distribution firms and fund companies with more than 25 CUSIPs* in the Security Issue Database, will now pay $1,200 a month. For funds with 25 CUSIPs or less, the fee will be $600, a reduction of $150 per month.
Bergin stressed that DTCC remains committed to delivering services at cost and will closely monitor these services and readjust fees if circumstances allow.
*CUSIP is a registered trademark of the American Bankers Association (ABA); the CUSIP distribution system is owned by the ABA and operated by Standard & Poor’s.