Networking, offered by DTCC’s Wealth Management Services (WMS), is the industry standard for mutual fund account reconciliation and dividend processing. Through Networking, all customer account-level information – whether in an omnibus or non-omnibus environment – can be exchanged and reconciled between fund companies and broker/dealers and other distribution firms, allowing identical information to appear on all parties’ records.
Networking brings multiple efficiencies for fund companies, broker/dealers, and other distribution firms, automating previously manual and error-prone work involved in mutual fund customer account reconciliation and dividend processing.
- Networking for Direct Accounts, which allows funds to pass information to broker/dealers and other distribution firms on customer accounts held directly at the fund.
- Share-Aging File, for customer accounts that are being transferred from one broker/dealer or other distribution firm to another and are migrating to or from an omnibus environment. This feature allows WMS clients to pass customer account information needed to determine redemption fees, 12b-1 trail commission fees and whether money market shares are commissionable.
- Networking for Standardized Data Reporting (SDR) to support SEC Rule 22c-2, which requires intermediary firms to respond to requests from fund companies for shareholder-level information in omnibus accounts so that funds can monitor accounts for possible market-timing and frequent-trading activities and impose redemption fees, if applicable.
- Omni/SERV®, providing a central location for participating brokerage firms to transmit Omnibus Activity and Position files to fund companies.
Networking clients choose from one of three types of reporting options based on the structure of their business and reporting responsibilities, and may generate consolidated statements with the most current and accurate information available.
Although Networking does not require participation in Wealth Management Services’ Fund/SERV®, the two services work best when used together.
Networking is conveniently accessible via mainframe over DTCC’s SMART connection or through DTCC WebDirect, a Web interface that gives WMS clients direct access over the Internet to services provided by DTCC's subsidiaries.
Who Can Use the Service
Any financial organization interested in the service and that meets membership qualifications for DTCC’s National Securities Clearing Corporation (NSCC) subsidiary may use the service.
- Reduces reporting errors through a uniform record format.
- Maintains identical customer account records at broker/dealers and other distribution firms and investment companies, or their transfer agents.
- Captures and reports activity to broker/dealers and other distribution firms within the next cycle period.
- Facilitates consolidated statements that accurately show all client holdings.
- Enhances reporting control because each organization can choose the level of customer reporting that best matches its business practice and customer service objectives.
- Optimizes accurate compliance reporting and regulatory requirements regarding breakpoint calculations, frequent trading and short-term redemption fees.
- Saves time and money by eliminating the need for the receipt, processing and storage of paper statements.
How the Service Works
- Reports any financial transaction occurring directly at a fund that causes a change in the balance of a sub-account.
- Includes closing share balances for Fund/SERV-initiated activity.
- Reports year-end tax information on reallocated distributions.
Dividend Distribution Reports
- Transmits dividend information, including the dividend rate, posting, record and payable dates, and short- and long-term capital gains.
- Reports new share balances for each customer account, whether the customer has opted to have dividends reinvested or be paid in cash.
- Provides an option to use NSCC's net settlement system for members who service accounts that elect cash dividends .
- Allows for the file transmission of closing share balances for each sub-account at the fund to broker/dealers and other distribution firms.
Account Maintenance & Reconciliation
- Enables funds to send non-financial, detailed customer account information to participating firms on a particular security.
- Provides a scrub file from funds so broker/dealers and other distribution firms can review how their accounts have been set up at a fund.
- Allows broker/dealers and other distribution firms to request a full set of fund conversion records for a particular Networked account via a Fund Account Response Indicator.
- Offers scheduled, detailed reporting of each account's setup, including withholding information, branch number, account representative number, and distribution option information.
Networking Level Account Control
Firms select the level of reporting controls for each type of account.
- Level 0: This level can be used to identify underlying customer accounts that are non-Networked, held directly at a fund company, or are trust accounts that are shared by a trust company and a brokerage firm. This dual arrangement allows both parties to share information, with the trust maintaining fiduciary responsibility for these accounts.
- Level 3: Broker/dealers and other distribution firms maintain full customer account control, handling all orders, customer statements and reporting. Underlying customers have no direct privileges with the fund company.
- Level 4: The fund company handles all underlying customer communications. Underlying customers have full shareholder privileges directly with the fund, or can manage transactions directly through a brokerage firm and other distribution firms that process orders and are informed by the fund company of all customer account record changes.
For More Information
Please contact your Relationship Manager or the Account Management Team at (212) 855-8877.
Networking is a service offering of National Securities Clearing Corporation (NSCC), a wholly-owned DTCC subsidiary. The Service is governed by applicable Rules, Procedures, and Service Guides of NSCC, which contain the full terms, conditions, and limitations applicable to this Service. The Service description herein is for informational purposes only, and NSCC reserves the right to make modifications.