The DTCC said in a news release that the product is designed to help the fund industry comply with Rule 22c-2, a Securities and Exchange Commission (SEC) mandate designed to combat short-term trading and market timing. The rule requires that funds hammer out agreements with intermediaries, providing for access to shareholder data within omnibus accounts and evaluation of trading patterns for possible market-timing activity.
The new service, Networking for Standardized Data Reporting, allows fund companies to request, and distributors to transmit, information at two levels:
- the summary level for super omnibus accounts (comprising multiple plans, trusts and/or investor omnibus accounts). Data can include account numbers, dollar amounts and numbers of buys and sells.
- the detail level, where a fund company uses summary level data to request more specific information, such as details on shareholders in a 401(k) or retirement plan.
The new service leverages existing technology in Networking one of its key Mutual Fund Services, according to the news release.
Networking, provided by DTCC’s subsidiary, National Securities Clearing Corporation, is used by the mutual fund industry to exchange and reconcile customer account-level activity between fund companies, broker/dealers and other distributors. It offers centralized settlement of cash dividends and capital gains distributions, the announcement said.
More information is at www.dtcc.com.