DTCC Solution Aids in SEC Rule 22c-2 Compliance

April 10, 2006 (PLANSPONSOR.com) - A new Depository Trust & Clearing Corporation (DTCC) solution helps the mutual fund industry comply with Securities and Exchange Commission (SEC) rule 22c-2, designed to combat short-term trading and market timing.

According to the DTCC announcement, the solution will expand the functionality of Networking, a core mutual fund service provided by National Securities Clearing Corporation (NSCC), a subsidiary of DTCC, by creating a data stream within Networking for fund companies to request and obtain shareholder identity and trading information from intermediaries.   The data exchange will help fund companies better monitor trading frequency by investors whose transactions are housed in omnibus accounts, and ensure that a fund’s market-timing policies are being enforced.

Intermediaries can pass information in two stages – the first of which is summary data for accounts composed of multiple plans, trusts and/or investor omnibus accounts.   “This information may include account numbers, dollar amount and number of buys and sells, and it will help fund companies identify where trading is occurring frequently,” explained Paul Bucaoto, DTCC director, Product Management, in the announcement.

The second stage includes detail data, where the fund company may use the data from the summary level to request more specific information, such as additional details on shareholders in a particular 401(k) or retirement plan, information on a financial rep, or Fund/SERV control numbers.

In designing the changes to Networking, DTCC worked in partnership with the Investment Company Institute’s Standardized Data Reporting Working Group and several task forces.

For more information, visit  www.dtcc.com .