Josephine Torelli, DTCC Vice President, Mutual Fund Services
In this WMS Perspectives series, DTCC Connection (DC) sits downs with Wealth Management Services (WMS) business leaders to learn about their roles and delve into key initiatives. The series began with Justin Schwartz, Director, Alternative Investment Products, who discussed his group’s latest product strategy developments and the market outlook for alternatives.
The conversation continues with Josephine Torelli, DTCC Vice President, Mutual Fund Services, who oversees product strategy and development for mutual fund products and services. Torelli discusses her unique perspective on clients’ needs and how the mutual fund team collaborates to address these needs.
DC: How does your experience in the mutual fund industry help you serve DTCC clients?
JT: I’ve been with DTCC since 2009 and prior to that spent 25 years working at a mutual fund company. I guess you could say I’ve been immersed in the mutual funds world for a really long time! Throughout my career, I’ve witnessed a business that relied on manual, overburdened processes transform into today’s enormous industry thanks to the streamlined, automated processing systems DTCC built for, and with, the mutual funds market. Through the years this market has experienced so many challenges and opportunities that I’ve never found my job to be boring.
In my previous role I was tasked with implementing National Securities Clearing Corporation’s (NSCC) mutual fund services for the company I worked for. I watched my first FundServ® trade in the ‘80s and knew it would radically change and improve our business.
At the time, I sat on the Investment Company Institute’s broker/dealer advisory committee (BDAC). Currently I represent DTCC on the committee, as well as the Investment Company Institute’s bank trust retirement advisory committee (BTRAC), which means all of the other members are my clients. My committee seat gives us an opportunity to listen to multiple perspectives on the regulatory and operational challenges impacting our clients’ business. This allows us to collaborate for a solution and in turn helps us develop or enhance services to increase standardization, cut clients’ costs and reduce risk.
DC: As a former client, you’re especially qualified to understand clients’ challenges and perspectives. How does that mindset influence the way your team does business?
JT: Product development in WMS has always been a collaborative process. We strive to understand our clients’ needs through ongoing conversation, surveys, working groups and the like. My industry background helps me in our collaborative approach. For example, I readily understand why a firm may need to receive an NSCC price and rate file by a certain time, why social codes are important or the time of day that our clients are most active.
Our team makes it a daily priority to speak with members of our client base. We actively participate in—and many times lead—task forces, steering committees and working groups. We are working closely with our clients to identify their operational needs related to the upcoming regulatory changes for money market reform.
Each year our five-member Product Management team, which collectively has more than 130 years of experience, completes a number of system releases, the majority of which originate from discussions with our clients and the ICI committees. This past year, we significantly decreased the amount of time necessary to communicate price and rate data. We released a system upgrade that provides near-real-time transmission of price and rate information.
DC: What are the key “pain points,” for clients and the industry, the mutual fund team at DTCC is addressing now?
JT: We are working in a number of different areas; helping clients meet their regulatory requirements for money market reform has been a top priority.
Under new U.S. Securities and Exchange Commission (SEC) rules, mutual fund companies will need to meet the many different requirements of money market reform. One example of these updated rules applies to retail money market funds which must have policies and procedures reasonably designed to limit beneficial owners of the fund to natural persons.
The industry utilized the NSCC social code listing to assist in defining retail versus institutional types of accounts. As part of our review, we discovered additional codes were needed to in further categorize accounts. Our team was able to deliver new codes for all our services, where social codes are provided, in November 2015 and provide our clients with the necessary lead time ahead of the October 2016 amendment date.
Additionally, our team remains focused on transparency needs. More specifically, identifying where our services meet these transparency requirements and where there is opportunity to enhance or deliver services.
DC: Could you talk about the Mutual Fund Profile Security database and what makes the offering unique?
JT: Profile Security is an NSCC database that helps funds communicate key, up-to-date, fund-related data to their distribution partners in a standardized format and from an easy-to-access centralized location. With fund companies’ active and ongoing input into Profile’s databases, firms have the ready access they need to critical data for transacting in funds.
DTCC, through Profile and our other services, is the only provider of certain data elements, such as blue sky data. Our services set us apart by offering operational data that cannot be found in fund documents alone.
DC: How can clients learn more about mutual fund’s suite of services and how to utilize them?
JT: We provide a variety of learning materials for clients on DTCC Learning. I urge clients to explore the Industry Best Practices section, where we’ve posted information on a number of topics, such as Profile Security data dictionary and best practices, 529 Account Aggregation, Linking SSNs/EINs to Determine Breakpoint Eligibility, Share Aging, Trust Processing and much more.
DC: What mutual fund related initiatives can clients expect to see in 2016?
JT: Helping clients prepare for money market reform is obviously one of our top priorities. Money market reform will require changes to a number of our services and we will be focused on gathering our clients to define best practices and user guides to support this new rule. In addition to money market reform, we are continuing to work on enhancements to Profile Security and collaborating with clients to further enhance our services.
Related: WMS Perspectives: A View Into DTCC’s Alternative Investment Product Services