Commission Settlement facilitates the exchange of mutual fund commission information between distributors and fund companies and streamlines, centralizes, and settles commission payments.

Benefits
Commission Settlement provides a standard process for paying commissions.  By utilizing the service, participants can:

• Reduce Costs and Increase Efficiency
  Decrease overhead expenses associated with manual and paper processing of commission information and payments.  Automation decreases the resources needed to process commissions while increasing the volume of transactions that can be processed each day.
    
• Simplify Reconciliation
  Create and exchange accurate commission records through standardized formats.  The service simplifies the reconciliation process on both sides of the transaction and between trading partners.
     
• Expedite Payments to Reps
  Eliminate manual processing and streamline your back-office procedures to allow for timely completion of commission payments for your reps.
     
• Centralize Money Settlement
  Simplify the money settlement process and eliminate the risks associated with multiple settlement venues.  A single net settlement figure is calculated for each participant every day.

Features
Using Commission Settlement will significantly increase the ease and speed of commission processing. 
Features include:

• Flexible Access
  Fund companies have flexibility in submitting data to DTCC.  While the service accommodates single batch processing or multiple-batch processing for data entry, distributors receive consolidated data once a day from DTCC.
      
• Supports Multiple Commission Types
  All types of mutual fund commissions can be processed through Commission Settlement including Contingent Deferred Sales Charge (CDSC) payouts, 12-b-1 fees, trail commissions, and other payments.

How Commission Settlement Works
Mutual fund companies electronically transmit commission settlement transactions to DTCC.  DTCC sends output files to distributors.  Settlement for commission files received by 2 p.m. occurs the following day.  On the day before settlement date, DTCC notifies both fund companies and distributors of their commission settlement obligation.

Participants can access Commission Settlement through a mainframe or Internet connection.

Who Can Use Commission Settlement
Mutual fund companies and other product issuers, distributors including broker/dealers, independent broker/dealers, insurance carriers and other financial intermediaries can use Commission Settlement.  Participants must become members of National Securities Clearing Corporation in order to utilize the service.