Overview

Commission Settlement is the industry’s most efficient method for fund companies to transmit commission and fee data to broker/dealers and other distribution firms.It also allows firms active in retirement planning to process firm-to-firm commissions in the same efficient manner as fund-to-broker commissions.

The service supports all types of fund commissions, including Contingent Deferred Sales Charge (CDSC) payouts, 12b-1 fees (or trail commissions), and other payments. Settlement occurs through NSCC's settlement system.

Commission Settlement is accessible via mainframe over DTCC’s SMART connection.

Who Can Use the Service

Any interested financial organization that meets NSCC qualifications can use the service. Commission Settlement requires that participants be qualified to settle at NSCC.

Benefits

• Expedites the distribution and settlement of fund commissions.
• Simplifies the reconciliation process by providing standardized formats for the exchange of records between funds and firms.
• Reduces costs associated with manual processing of commission payments.
• Accommodates single-batch processing.
• Consolidates money settlement with other NSCC activity.

How the Service Works

• Input from Funds or Firms: Single-batch files are sent to NSCC for processing by 2 p.m., Monday through Saturday. Errors can be corrected through a reversal of the transmission by the fund by sending a new file with a credit /debit to the firm.
• Output to Firms: Two single-batch files of detailed and summary commission data are sent to firms after 3 p.m., Monday through Saturday.
• Settlement: Settlement for accepted commission files transmitted to NSCC by 2 p.m occurs the following day. One day prior to settlement date, NSCC notifies both funds and firms of their commission settlement obligations. Commissions are netted with other NSCC activity at the end of the day, and settlement takes place in Fed Funds.

For More Information

Please contact DTCC Relationship Management at (212) 855-8877.