Burton Keller. Data Management. Executive Vice President. Delta Data. Mutual Funds and Other Pooled Investment Products

Transcription

1 Data Management Mutual Funds and Other Pooled Investment Products Burton Keller Executive Vice President Delta Data

2 Overview Delta Data background what we do. The trouble with mutual funds - why are there so many operational issues with mutual funds and other pooled investment products? Why is it important to have a good data management program around your fund securities and other pooled products? How do you solve the data management problem? Conclusion

3 Delta Data Background 25 year old software product company Develop and deploy software for securities processing 100% focus on mutual fund industry for past 15 years Help tier-1 financial services clients manage data and daily operational processes Our solutions reduce cost; Our solutions mitigate risk; and Improve data governance with robust control and audit capability

4 Products and Services FUNDLinx - mutual fund processing platform for trading, recon, income processing and revenue tracking for bank trusts and retirement plan service providers Revenue Manager calculate, l invoice i and reconcile revenue sharing on co-mingled assets in omnibus or fully-disclosed fund accounts 22(c)2 market timing compliance platform for both buy-side and sell-side FUNDViews web based service helping clients better use data from DTCC s Profile security issue database

5 Products and Services Cont d DTCC Profile Security Issue Database provide technology support in collaboration with the DTCC CUSIP/Ticker Cross-Reference Service FUNDdox web based repository of compliance filings for all open-end funds, ETFs, variable annuities and money market funds Fee Manager fund company solution to manage distribution expenses / subaccount invoicing Security Master sell-side side data management application geared for mutual fund securities and other pooled investment products

6 The Trouble with Mutual Funds One of the most popular investment vehicles with $12.5 trillion in domestic funds Why do mutual fund securities present so many operational challenges? Complex instruments thousands of data elements static data points, corporate actions, daily pricing, accrual rates, record-date date dividends, performance, expense ratios, managers, holdings, etc Getting g complete and accurate data no single data source to receive all the data with 100% accuracy No Common Data Dictionary

7 The Importance of a Good Data Management Program Subaccounting firms now do shareholder accounting accurate data for subaccounting systems is critical. FINRA is starting to notice. DOL fee disclosure rules 408(b)(2) and 404(a)(5) Trading systems need accurate and current rules Client communications should be up to date and correct Cost of data acquisition of redundant data from multiple vendors represents substantial hidden cost Customer service, brand reputation, compliance initiatives and competitive advantage all are affected by the quality of your data management program

8 The Data Management Solution? Simple! A centralized data management application, designed specifically for the unique issues surrounding mutual funds and other pooled investment products. So why aren t firms doing this today? Data management applications for securities have existed for years - on the buy side great for equities and fixed income securities. Not so great for pooled products like funds. Your options for implementing a comprehensive data management application for mutual funds, to date, have been very limited. So what are your options?

9 Data Management Application Options Ranked by highest risk to lowest risk AND highest cost to lowest cost 1. Build a system from scratch 2. Configure a buy-side data management application to work with funds 3. Build a system using a third party framework for data management 4 License a third party data management 4. License a third party data management application designed specifically for pooled investment products

10 Drivers for Security Master 20 years of observations Wide sell-side usage of our FUNDViews product. Its a great tool, but is not the full solution. Clients wanted more add custom data points; take in proprietary data; apply business rules to the data In late 2010 we decided to build the solution eliminated barriers based on 25 years experience selling and installing software systems

11 Data Sources Security Reference, Pricing, Dividend and Holding Data Consumers of Data Morningstar DTCC Profile Gold Copy Brokerage System Subaccounting Platform Lipper Stage for Approval Reporting System Prospectus Web Portals Content Software Thomson Reuters Manually Keyed Data Custom Sources Apply Business Rules and Prioritize Data Load, Normalize and Translate Reporting Arbitrate Differences

12 Framework and the Feature Set The Framework Require minimum involvement from a firm s IT department All configuration should be done via the User Interface Should be a browser based Software as a Solution (SaaS) so no Capex required Should be pre-configured specifically for funds and other pooled investment products Have all the major third party data providers already mapped into a common data dictionary Provide optional modules so a firm could license only the functionality required

13 Framework and the Feature Set Feature Set Allow multiple data feeds from third party data providers as well as proprietary data feeds Well-defined comprehensive data dictionary that has all the data feeds normalized and mapped to the same common data points Define preferred source at the data point level Allow addition of custom data points via the UI Provide a business rules engine configurable by analysts via the UI Exception workflow to handle rule violations to include remediation steps and approval process Offer single sign-on capability

14 Framework and the Feature Set Feature Set cont d Multiple configurable workflow processes Grouping of securities into custom portfolios Allow for multiple gold copies of the data Access and distribution of audited data Create elaborate custom exports including scheduling via the UI Published API for integration into web portals, etc Configurable user interface based on the user s role Ability to alias any data point name to common terminology used within the firm Role-based security that is granular down to the data point and portfolio level

15 Conclusion Get control of mutual fund data and save money by implementing a good data management application built using the same basic building blocks used by buy-side data management applications The question is, do you build, modify or license an application? Take a look at Security Master for costs savings; reduced risk; and minimal implementation costs Visit us at Booth #302