Obtaining accurate and reliable corporate actions and dividends data is critical for fund distributors, so they can record mutual fund income to customer accounts on a timely basis. However, the data distributors rely on to process billions of transactions is still delivered in a piecemeal manner. Mutual fund shops and distributors are dependent on four major sets of data: reference, pricing, dividend, and corporate actions. Considering that often firms take in this data from up to four different providers, it’s easy to see how a fragmented data marketplace can affect operational efficiency. Read more
Will You Be Ready If FINRA Calls? Brokers Are Running Out of Time for Mutual Fund Fee Waiver Remediation
Investment companies have long allowed some retirement plans to buy Class A mutual fund shares with no up-front commission, so investors can benefit from investing with no commission as well as benefiting from lower management fees. But during routine audits in 2014, the Financial Industry Regulatory Authority (FINRA) discovered that a lot of broker-dealers hadn’t been reading (and/or complying with) all the fine print on fund prospectuses. Because of inadequate supervisory controls and training, investors entitled to sales charge waivers were either paying the sales charge, or being sold Class B or C shares with back-end sales charges and higher ongoing fees and expenses, even when A shares were available. Read more
A never ending series of new regulatory and compliance mandates means that the broker-dealer community is continually having to adapt to change. In response, it’s investing in enterprise software that can handle large volumes of data, and integrate with “data as a service” solutions.
While it was the need to satisfy regulators’ demands for transparency that initially spurred the mutual fund industry to upgrade its back office technology and IT systems, the best data management utilities are now prized for their ability to provide real-time insight and analytics, and speed up decision making. Read more