Networking is a centralized system through which all customer account level activity--other than order processing--can be exchanged between mutual fund companies and their distribution partners.  This automated system allows identical information to appear on the records of both the distributor and the mutual fund company or its transfer agent.

Benefits
Networking provides the most convenient and efficient way to maintain non-trade-related client information.  Networking enables participants to:

• Reduce Reporting Errors
  Since customer account information is exchanged electronically, manual updates are eliminated, thereby minimizing the potential for discrepancies.
  
  
• Eliminate Duplicate Systems
  Networking allows identical account records to appear at both the mutual fund company and the distributor.  As a result, distributors no longer need to build and maintain separate systems to track positions and calculate dividends.
  
  
• Increase Efficiency and Savings
  Standardization significantly reduces the time and cost of reconciling customer accounts while eliminating the need for the receipt, processing and storage of paper statements.
  
  
• Improve Customer Service
  Having access to accurate and complete customer information facilitates better customer service.  Distributors can produce one statement--based on the fund companies' records--showing all client holdings.  Networking also enables distributors to maximize the features fund companies offer such as cash or reinvested dividends, rights of accumulation, letters of intent and contingent deferred sales charges.

Features
Networking provides an accurate, timely and flexible means for distributors to monitor their clients' mutual fund assets.  Features include:

• Flexible Reporting Control
  With multiple levels of reporting, each referencing different levels of account responsibilities for firms and funds, firms can choose the level of reporting responsibility that best accommodates their operations and goals for client service.  The details for each level can be found in the Networking diagram .
  
  
• Consolidated Money Settlement
  Networking streamlines the settlement process, enabling distributors to receive a single payment for cash dividends, capital gains distributions and other cash distributions from DTCC via Fed Wire on the payable date.
  
  
• Standardized Information
  A standardized record format allows identical customer account records to appear at both distributors and fund companies or their transfer agents.
  
  
• Dual-Party Networking
  Banks and trusts can use Trust Indicators in order for account information to appear identically on each party's records.  See the  trust processing guidelines  for additional details.

How Networking Works
Using a mainframe or Internet connection, distributors and funds can update information such as address and dividend option changes and receive confirmations of these transactions.

Networking's extensive functionality enables customer to run

• Sub-Account Activity Reports;
• Dividend Distributions Reports; and
• Position Statements.

While Networking is designed to work with  Fund/SERV® , it does not require Fund/SERV participation.

Who Can Use Networking
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.  Participants must become members of National Securities Clearing Corporation in order to utilize the service.


Networking Diagram