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Recent Profile Security Enhancements Increase Accuracy and Timeliness of Mutual Fund Data

By DTCC Connection Staff | October 3, 2018

Recent Profile Security Enhancements Increase Accuracy and Timeliness of Mutual Fund Data

New features continue to improve user experience

DTCC’s Mutual Fund Services has completed a series of enhancements to Mutual Fund Profile Service II (Profile Security), further automating and streamlining client access to some of the most current and accurate mutual fund information available anywhere in the industry. These latest enhancements and updates were implemented over the summer.

Profile, a multi-dimensional repository of three comprehensive databases — Security, Participant and Distribution — allows funds, broker/dealers and other distribution firms to automate and streamline the exchange of information regarding securities, fund prospectus, operational rules, participants and distribution information. Profile Security leverages cutting-edge Artificial Intelligence (AI) technology to enable the Security Issue Database to capture, analyze and distribute critical data in a smarter and faster way, and is powered by a cognitive engine designed to learn from user feedback.

“Profile Security is a continually evolving product with exciting new capabilities and features, all based on feedback from our clients and the industry,” said Josephine Torelli, Executive Director, DTCC Mutual Fund Services. “Last year, we focused on optimizing the user experience by launching an intuitive web interface with improved navigation and easier data entry. This year, we’ve updated and added several new data fields and values to allow Funds to communicate additional operational information to Firms, providing greater data entry efficiencies and increasing reporting intelligence available to support the data review process.”

New Data Points

With Profile Security, asset managers communicate fund-specific information to their distributors through a single, dynamic source; and distributors have access to a broad range of the most current and accurate mutual fund rules-based information. These latest enhancements further improve data entry. Some of the new data points include:

  • “Large Trade Notification” and “Large Trade Dollar Threshold Amount” fields – New required fields indicate whether or not a Fund requests notification if a large trade dollar amount threshold is met for a security, and the amount considered “large” for the specific security.
  • “Exchange Buy Eligibility” field – New data point value to identify when restrictions apply to exchange buy purchases.
  • “Eligible for Externalized Commission” field – A new required field to indicate share classes which are eligible for Externalized Commission.

Enhancements to Scorecard Reports and Alerts

“Data integrity in Profile Security is absolutely critical, and the accuracy of the data in the system sets it apart from other fund information sources,” said Sharon Wilner, DTCC Director, Product Management. “These recent changes have made it easier for clients to ensure that data is both current and accurate.”

  • Email alerts: Previously, a single e-mail alert was generated for clients in the morning, notifying Funds of new or outstanding variances. Since variances can be generated throughout the day, with this latest enhancement an additional email is now distributed at approximately 3pm EST, notifying Funds of any new variances, along with existing unaddressed variances. This provides clients with additional opportunities to make necessary updates more than once a day.
  • Generate Historical “Quality Index Score Reports”: Profile Security features personalized “Scorecard Reports,” based on a weighted algorithm, which encourage clients to maintain accurate and reliable fund data.

The score, taken from a comparison between data in public filings in the SEC’s EDGAR system and the Profile Security database, indicates if funds have taken action to clear system edits and variances. The scorecard reports are available directly from within the Profile Security application, helping clients assess the reliability of the data, mitigating the risk of data inaccuracies and misinterpretation. With this latest enhancement, Funds can also view and download historical periods of the Scorecards from the User Interface.

Automated Data Review

Profile Security uses predictive analytics, advanced AI, machine-learning and even robotics to automate the comparison of data point values between Profile Security and new EDGAR filings and present any updates or differences to the client for their review and approval. The system currently contains more than 26,000 security issue IDs and over five million data points, and with machine learning, gets “smarter” over time as it clarifies initial misinterpretations of terms.

“Profile Security is a powerful system that is continuously learning,” said Yvette Guzman-Smith, DTCC Associate Director, Product Management. “The AI capability, which is unique among all our systems, ‘reads’ the prospectus and returns potential variances and errors to the clients for validation. The new user-interface is also much more robust, with rules-based data points to prevent incomplete data from being entered, which is returned to clients in real-time.”