Fund/SERV is the industry standard for processing and settling mutual fund transactions.

Overview

Fund/SERV is the industry standard for processing and settling mutual fund transactions. Through automated, standardized formats and a centralized platform, fund companies, banks and trust companies, third-party administrators (TPAs), broker/dealers and other distribution firms can complete order entry – purchases, exchanges and redemptions – as well as confirmations, registrations and money settlement.

Fund/SERV is accessible via mainframe over DTCC’s SMART connection, through DTCC’s MQ interface, and through DTCC WebDirect, a Web interface that gives participants direct access over the Internet to services provided by DTCC's subsidiaries

Who Can Use the Service

Any interested financial organization that meets NSCC qualifications can use the service. This includes non-U.S. entities, which have the option of applying for direct membership or using the service through a U.S. affiliate or other organization that is a member.

Benefits

Enhances operations:

• Automated and standardized procedures make processing more efficient and cost effective.
• 22-hour operating day offers flexible order entry.
• Standard formats reduce errors associated with manual order entry.
• Industry-wide platform accommodates volume growth.

Reduces risk:

• Standardized orders are captured in an automated processing environment that reduces operational and compliance risk.

Provides daily net settlement of total mutual fund activity.

• Only one payment - debit or credit - needs to be made, eliminating the risks associated with multiple settlement venues.

Supports regulatory requirements:

• Information, such as taxpayer identification numbers, can be transmitted through Fund/SERV, making it easier to identify and apply proper breakpoints on transactions.

Supports multiple product types, such as:

• 1940 Act Funds: loads; no-loads, open- and closed-end funds, money market funds
• Other pooled investment products:
  • Offshore funds that can trade daily
  • Stable value funds
  • Guaranteed Investment Contracts
  • Bank Collective Investment Trusts
  • Unit Investment Trusts
  • Section 529 Qualified State Tuition Programs

How the Service Works

• Fund/SERV processes:
  • Regular orders
  • As-of orders
  • Exchange orders
  • As-of exchanges
  • Fund-originated orders
  • Fund-originated as-of orders
  • Account re-registrations between fund companies and distribution firms
• Order Processing: Order processing occurs from 2:00 a.m. Eastern Time (ET) until midnight, Monday through Friday.
• Fund Account Registration: Firms may transmit registration files any time from 2:00 a.m. ET until midnight. Money mark et fund registrations must be submitted with orders.
• Order Confirmation: Funds may confirm orders and firms may retrieve confirmations from 2:00 a.m. ET until midnight. Money market purchase orders may be confirmed after settlement.
• Settlement: Flexible settlement features support various investment product requirements, such as "Same Day" (T), "Next Day" (T+1), and "T + 3" settlement cycles. All obligations are settled in Fed funds at NSCC.
• Settlement Override: Firms can establish a settlement date for particular orders between one and seven days from the day the order is placed. This benefits firms offering 401(k) transactions or WRAP programs that may require a settlement date that is different from traditional retail orders.
• Alternate Settlement: Funds can establish for certain firms a settlement date for particular securities.
• Exception Processing: Fund/SERV allows for pre-settlement and post-settlement corrections, as well as firm exits, firm and fund deletes and cash adjustments.
• Cash Adjustments: Funds and firms can make claims for dividends, capital gains, commission billing and adjustment, and systematic withdrawal payments. Funds may also update contingent deferred sales charges and long- and short-term capital gains using this feature.
• ACATS - Fund/SERV: The Automated Customer Account Transfer Service (ACATS) links to Fund/SERV and allows mutual funds to electronically update account registrations when a customer account is transferred from one brokerage firm or bank to another; from a fund to a brokerage firm; or from a brokerage firm to a fund.
• Re-Registrations: Fund/SERV allows mutual funds and distribution firms to electronically update account registrations when a customer account is transferred from a fund to a firm, or from a firm to a fund.
• Underwritings & Tender Offers: Investment companies can take advantage of this centralized automated environment to process fund offers. NSCC's Underwriting capability supports Expressions of Interest in Initial Public Offerings, while the Tender Offers capability supports the redemption of mutual fund shares.

For More Information

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