DTCC has enhanced its Cost Basis Reporting Service (CBRS) to help financial firms and other market participants comply with a January 2011 mandate requiring the reporting of cost basis information to investors and the federal government.

Overview

The Cost Basis Reporting Service (CBRS) is an automated system that gives financial firms the ability to transfer customer cost basis information from one firm to another on any asset transfer. The system provides a centralized communications hub that mitigates risk, promotes standardization and helps customers meet their regulatory requirements in an efficient and cost-effective manner.

Who Can Use the Service

All financial intermediaries subject to the IRS regulations are eligible to apply to use CBRS, including firms who are not currently members of any service offered by one of DTCC’s affiliate companies.

Benefits

• Provides the industry with a secure and automated standard for passing cost basis information when assets or customer accounts transfer between financial intermediaries<
• Assists financial organizations with complying with cost basis legislation
• Extends the efficiencies and capabilities of the previous CBRS system, used by broker-dealers and banks, to new parties, such as transfer agents, issuers, and mutual fund companies

How the Service Works

After a firm transfers an asset to a counterparty, it can use CBRS to send the asset’s cost basis information to that counterparty. The service also allows a firm to send corrected cost basis information (if necessary), request cost basis if it has not received it, or reject cost basis it feels is not correct.

Features of the service include:

• CBRS has two input record types: Asset records and Tax Lot records. A firm submits an Asset record for each asset for which it needs to pass cost basis information. The Asset record must have at least one, but can have an unlimited number of, associated Tax Lot records. Tax Lot records contain detailed cost basis information for each Asset record.
• Cost basis information can be supplied for any asset transfer, even transactions that occur outside of DTCC’s affiliate companies.
• The records include data elements relevant to the IRS regulations, such as information about gifted or inherited shares.

For More Information

Please contact DTCC Relationship Services at 800-422-0582.