The introduction of Fund/SERV® revolutionized the mutual fund industry. Mutual funds captured the attention of the public in the 1980’s and ‘90’s, with investments hitting record highs. Surging growth in the market threatened to swamp the industry with an unrelenting number of telephone calls, faxes and wire order transmissions, which were the common trading tools available to support transaction processing at that time. This primarily manual environment gave rise to significant challenges, many of which were costly, such as transaction and account detail errors, significant delays in processing and reconciliation challenges – all of which impeded industry growth. The industry was in need of a mechanism to provide standardization and centralized processing to enable firms to fully realize the potential of this market.
Fund/SERV, the solution to this widely recognized industry problem was introduced to automate critical back office operations. Launched by DTCC’s National Securities Clearing Corporation (NSCC) subsidiary in 1986 in collaboration with an industry consortium, Fund/SERV provides the industry processing capacity and flexibility to facilitate the growth of fund companies and their industry partners, including broker/dealers, banks, insurance carriers and other financial intermediaries. Its ability to streamline and speed processing time while greatly reducing cost and operational risk triggered exponential growth of the market.
When first introduced, Fund/SERV had six clients processing 15 orders a day. Today, Fund/SERV has more than 940 fund users and 350 firm users around the world conducting an average of over 860,000 orders a day.
Over the years DTCC’s Wealth Management Services has enhanced Fund/SERV to continue to meet the needs of the market. DCC&S (Defined Contribution Clearance & Settlement), a key feature of Fund/SERV, economically leveraged NSCC’s existing technology and infrastructure to allow the defined contribution market to automate and simplify the processing of 401(k) orders. Other enhancements have brought the benefits of Automated Customer Account Transfer (ACATS-Fund/SERV) processing to mutual funds as well as automating 529 state college savings plans, stable value funds, bank collective investment trusts and many other types of investments.