DTCC’s enhancement to Networking facilitates standardized data reporting of omnibus accounts and supports the operational needs of fund companies and intermediary firms for compliance with SEC Rule 22c-2. 

Benefits

Using the SDR stream within Networking, fund companies can request and obtain shareholder identity and trading information from intermediaries, in compliance with the Securities and Exchange Commission’s Rule 22c-2.  The purpose of the rule is to combat frequent trading and market timing

The enhancement will help fund companies better monitor trading frequency by investors whose transactions are housed in omnibus accounts – a pool of individual accounts combined into one account, usually in the name of an intermediary – and ensure that a fund’s market-timing policies are being applied.

Features

Intermediaries can pass information in two stages:

• At the summary data level, where information is passed for super omnibus accounts – those composed of multiple plans, trusts and/or investor omnibus accounts.  This information may include account numbers and the dollar value of all shareholder buys and sells. 
• At the detail data level, where information is passed on a specific account or at the shareholder trading level.

How it Works

Networking for SDR supports several functions:

• Data requests
• Acknowledgments
• Summary responses
• Detailed responses

Who Can Use Networking for SDR

Mutual fund companies and other product issuers; distributors, including broker/dealers; independent broker/dealers; banks and trust companies; third-party administrators; insurance carriers, and other financial intermediaries can use Networking for SDR.

Participants must be members of National Securities Clearing Corporation, which offers several types of membership. For more details, contact your relationship manager or Mutual Funds Marketing at (212) 855-8877.