Fund/SERV is the industry standard for processing and settling mutual fund orders, including both 1940 Act and other pooled investment products for investment companies, money managers and financial intermediaries.

Overview

Fund/SERV is the industry standard for processing and settling mutual fund orders, including both 1940 Act and other pooled investment products for investment companies, money managers and financial intermediaries. The service provides standardized formats and centralized processing of purchase, redemption, and exchange orders, as well as account registrations, and provides participants with a single daily net settlement. Fund/SERV offers multiple processing cycles over 22 hours, giving trading partners convenient access to a centralized automated trading platform.

Fund/SERV is accessible  through mainframe  links; through DTCC WebDirect, a Web interface that allows participants direct access over the Internet to services provided by DTCC's subsidiaries; and through Fund/SPEED^SM, NSCC's XML interface.

Information is also available about Fund/SERV's Underwriting & Tender Offers function.

Who Can Use the Service

Any interested financial organization that meets NSCC qualifications can use the service.

Benefits

Enhances operations:

• Automated and standardized procedures make processing more efficient and cost effective
• 22-hour operating day offers flexible order entry
• Standard formats reduce errors associated with manual order entry
• Accommodates volume growth

Reduces risk:

• Standardized orders are captured in an automated processing environment that reduces operational and compliance risk

Provides daily net settlement of total mutual fund activity. Only one payment - debit or credit - needs to be made, eliminating the risks associated with multiple settlement venues.

Supports regulatory requirements:

• Information such as taxpayer identification numbers, can be transmitted through Fund/SERV, making it easier to identify and apply proper breakpoints on transactions.

Supports multiple product types, such as:

• 1940 Act Funds: loads; no-loads, open and closed end funds, money market funds
• Other Pooled Investment Products
  • Offshore funds
  • Stable value funds
  • Guaranteed Investment Contracts
  • Bank Collective Investment Trusts
  • Unit Investment Trusts
  • Section 529 Qualified State Tuition Programs

How the Service Works

• Fund/SERV processes:
• Regular orders
• As-of orders
• Exchange orders
• As-of exchanges
• Fund-originated orders
• Fund-originated As-of orders
• Order Processing: Order processing occurs in multiple processing cycles from 2:00 a.m. Eastern Time (ET) until midnight, Monday through Friday.
• Fund Account Registration: Firms may transmit registration files any time between 2 a.m. ET and midnight. Funds can opt to warehouse registrations at NSCC until settlement. Money market fund registrations must be submitted with orders.
• Order Confirmation: Funds may confirm orders and firms may retrieve confirmations from 2:00 a.m. ET until midnight. Money market orders may be confirmed after settlement.
• Settlement: Flexible settlement features support various investment product requirements, such as "Same Day" (T), "Next Day" (T+1), and "T + 3" settlement cycles. All obligations are settled in Fed Funds at NSCC.
• Settlement Override: Firms can establish a settlement date for particular orders between one and seven days from the day the order is placed.  This benefits firms offering 401(k) transactions or WRAP programs that may require a settlement date that is different from traditional retail orders. In addition, Fund/SPEED^SM  transmissions through Fund/SERV can be designated as settling outside NSCC's system.
• Alternate Settlement: Funds can establish for certain firms a settlement date for particular securities.
• Exception processing: Fund/SERV allows for pre-settlement and post-settlement corrections, as well as firm exits, firm and fund deletes and cash adjustments.
• Cash Adjustments: Funds and firms can make claims for dividends, commission billing, and commission adjustment. Funds may also update contingent deferred sales charges and long- and short-term capital gains using this feature.
• ACATS - Fund/SERV: Automated Customer Account Transfer Service (ACATS) links to Fund/SERV and allows mutual funds to electronically update account registrations when a customer account is transferred from one broker or bank to another.
• Underwritings & Tender Offers: Investment companies can take advantage of this centralized automated environment to process fund offers. NSCC's Underwriting service supports Expressions of Interest in Initial Public Offerings, while Tender Offers supports the redemption of mutual fund shares.

For More Information

Please contact Wealth Management Services Marketing at (212) 855-8877.