CRM OPERATIONS PANEL

Transcription

1 CRM OPERATIONS PANEL

2 AGENDA Fund Manager issues Dealer issues Systems, Technology and Data Issues Panel Discussion Questions- All

3 FUND MANAGER ISSUES DAVE CHEOP, INVESTORS GROUP

4 ASSESSING EFFECTS ON FUND MANAGERS CRM2 is a collection of obligations Most primarily affect dealers; some primarily affect managers; others affect both Not all managers are affected the same way- ie. pure managers versus models with distribution aspects Importance at the outset of analyzing requirements, identifying the changes that need to be made, budgeting for costs and planning for implementation

5 PROVISION OF INFORMATION Managers must provide information dealers and advisers need to meet their CRM2 disclosure obligations regarding trade confirmations and cost and compensation disclosure In force July 15, 2016 Principles based Includes sales charges and other charges deducted from net asset value of securities trialing commissions for compensation disclosure purposes FundSERV changes will facilitate delivery of information system changes to accommodate trailing commission reporting will be in place in September, 2014 Different manufacturers calculate trailing commissions slightly differently note: this information cannot be reconciled; expect increased volumes in call centre

6 COST DISCLOSURE Relevant for position cost reporting and other purposes Can be either Original cost - purchase cost plus transaction cost Book cost - original cost adjusted for distributions, return of capital etc. Manager cost and dealer cost may differ for same position Potential for client confusion Recommended method for industry?

7 ORPHANED ACCOUNTS Manager must provide annual account statements to client where there is no dealer of record Must meet new account statement requirements including transaction information, position cost, market value, investor fund protection, DSC disclosure Do not require cost, compensation and performance reporting

8 OTHER CONSIDERATIONS Trade confirmations Obligation on dealer to provide but some rely on manager Pre trade disclosure of charges Effect on Fund Facts delivery with trade confirmation? Performance reporting Performance reporting at fund manager level is time weighted calculation while reporting at the dealer level will be a money weighted calculation Explaining the difference will be challenging

9 DEALER ISSUES BILL DONEGAN, SCOTIABANK

10 MUTUAL FUND DEALER IMPACTS: YEAR ONE Planning, Business Requirements, Budgeting Disclosure operating charges and transaction charges trailing commissions 60 day notice of new or increased charges benchmark disclosure (July 2014) Service of revised RDD on existing clients. Pre-trade disclosure of charges and trailing commission (July 2014)

11 MUTUAL FUND DEALER IMPACTS: YEAR TWO book cost or original cost (July 2015) Inception date of cost reporting Training to explain to advisors Need to ensure collection of relevant information for year three cost and performance reporting.

12 MUTUAL FUND DEALER IMPACTS: YEAR THREE Trade confirmation cost disclosure (July 2016) Itemize and total costs on each transaction Annual Cost Report and Annual Performance Report Design of report, order of presentation, date of reporting Inception date of performance reporting Separate document or integrated in statement Technology issues Training So advisors can confidently and simply explain content to clients.

13 SYSTEMS, TECHNOLOGY AND DATA ISSUES RICHARD BINNENDYK, UNIVERIS CORPORATION

14 AREAS OF IMPACT DISCLOSURE Varieties of charges the client can be exposed to Sales and trailers Fee-based Nominee Intermediary DSC Transfers Registered Withdrawals

15 AREAS OF IMPACT REPORTING Disclaimers Variability of Outputs Business Rules Data Integrity Technology

16 AREAS OF IMPACT REPORTING Disclaimers Benchmarks MV Rules Investor Protection Fund Cost Definition ROR Definition Other (charges incurred, explanation of performance, etc.)

17 AREAS OF IMPACT REPORTING Variability of Output Cost Reporting Separate statement? Report on Charges Annually which run? Separate statement? Separate timing? Performance Reporting Annually which run? Same frequency as Report on Charges? Combined with Report on Charges? Separate statement? Separate timing?

18 AREAS OF IMPACT REPORTING Business Rules Cost Reporting Which calculation to use? What is the formula? Open vs. Registered Report on Charges Which charges to include? Calculating and presenting in context of an account or client Performance Reporting BOP Market Value Deposits and Withdrawals (including transfers) ROR calculation gross vs. net, type, periods

19 AREAS OF IMPACT REPORTING Data Integrity Cost Reporting Ensuring correct historical activity to calculate Implementing correct formula if different from current Report on Charges Capturing all charges in correct context (client vs. account) Performance Reporting Complete historical activity Accurate historical activity Simplify the Output

20 AREAS OF IMPACT REPORTING Technology Outputs/Formatting/Graphics Horsepower for Data 5 to 10x more complex Data Backups/Copies Electronic Delivery

21 PANEL DISCUSSION

22 QUESTIONS