FundSERV Inc.

FundSERV Update
June 15, 2012
David Purewal CA, CPA, CRISC, CISA
Director
Finance, Risk & Administration
“Coming together is a
beginning.
Keeping together is
progress.
Working together is
success.”
Henry Ford
Agenda
1. Business Update
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Financials
Data centre complete
2. Standards (XML Conversion)
3. Marketing Plan
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FUNDcom
GICSERV
FundFacts
Client Name (EPA)
Offshore Funds DTCC
Business Update
Fiscal 2011:
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Revenue up 2% YoY
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Expenses down 3% YoY
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Despite investments in GICSERV & DTCC
Head count up at 86 + 5
Rebate up 8% YoY to a record high
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Record high transaction volumes (up 4%)
Issued last week
Dealers received special $400k tax rebate
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Going forward, a portion of GST/HST will be refunded with the annual rebate 
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Extra $1MM included in last week’s rebate
Regulated as a clearing agency (OSC) Apr ‘12
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No change in costs
“You can't build a reputation on what you are going to do!”
Data Centre Rebuild
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Rebuild completed within the current location
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10‐year lease extension in Exchange Tower
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Proved our ability to run network & apps from 2nd site for extended period of time
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FundSERV BCP test coincides with IIROC BCP test
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Will participate in IIROC BCP test (Sep ‘12)
FundSERV
Standards
XML File 
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Benefit: FundSERV laying the groundwork for the future of the fund industry
Implemented 1st phase over the past weekend (month end & price files)
Commission and service fee files – June 2013
Transaction reconciliation and settlement files – June 2014
Working with FAS Mutual Fund Cmte on FD (fund profile) update over next 2 years Off‐cycle changes to accommodate FATCA and NI 31‐103 as required “A business that makes nothing but money is a poor business.”
Marketing Plan
Objectives:
1.
Educate customers
 “FundSERV 101”: one‐on‐one training  Raise brand awareness amongst advisors
 Increase dealer participation on N$M and FUNDcom
 Market GICSERV and DTCC service offerings
 Become the recognized fund facts repository for the industry
 Achieve critical mass for Client Name Automation
2.
Solicit ideas from customers
 Better understand distributor automation challenges  IIROC trading automated, but NFU + FUNDcom need work
FUNDcom
What is FUNDcom?
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Secure access to client holdings & related information
Single sign‐on
Web‐based
One inquiry ‐ multiple companies
Standardized screens & responses
Who uses FUNDcom?
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Advisors
Assistants
Head office administrators Branch managers
Fund company employees
How much are we using FUNDcom? What are my competitors doing?
FUNDcom
Current Inquiry Options:
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Account holdings/transaction history
Hypothetical redemptions
PAC/SWP/AWD
2,500,000
Distributions
2,000,000
Demographics
1,500,000
10% Free
DSC
1,000,000
GMWB
500,000
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Dealer A
Dealer B
Dealer Dealer C D Dealer E Dealer F GICSERV Update
GICSERV Background
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Genesis: Dealers approached FundSERV to automate the guaranteed investment process for the brokered market
Sponsors: Five large issuers and related dealers
Governance: GICSERV Standards Steering Committee (GSSC) and Standards Working Group Revenue model: Cost recovery
Why FundSERV
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Industry owned utility
Cost certainty through cost recovery business model
Hub and spoke network with existing connections to most issuers, distributors and technology vendors
Proven BCP capability and IIROC industry testing participant
Industry developed, non‐negotiable standards
Functional Delivery
v1 Q3 2012:
 Code Registry/Product Master
 Dealer Originated Orders
 Issuer Response/Confirmation
 Account Holding Reconciliation
 Issuer Scheduled Payments
 Multilateral Net Settlement Reporting/Messaging
 Web Order Entry Screens Key Features
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All files XML document type definitions
Embedded quality assurance through parse, schema and business edit validations
Nominee and client name platforms including insurance products Order plus settlement models – not tied to underlying market settlement convention and order cutoff
Issuer assigns issue and settlement date to confirmation
Future
Enhancements
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Dealer to Dealer Transfers via CDS ATON
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Met with FAS Transfers Subcommittee
Interactive Order Messaging
Re registrations
Non‐Financial Updates
CDIC Nominee Trust Reporting
Milestones
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Launched GICSERV.com
Published Standards v1 QA Testing
Industry UAT Testing v1
What is my vendor doing to prepare for GICSERV ?
Will we be ready?
April ’11
Sept ’11
Present
Q3/12 GICSERV is coming!!
FundFacts
FundFacts Repository
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Centralized, industry‐wide solution with no additional cost
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Web‐based, one stop shop for Fund Facts documents
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Mutual funds and segregated funds
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Launched June 27, 2011
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Currently 31 fund companies (50% of FundFacts universe) have filed with ongoing awareness campaign to get manufacturers to utilize repository 
Advisors can register and email fund facts to clients directly from site.
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Interface to Fund Co websites
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Can accommodate POS audit trail if needed
Client Name
Automation -EPA
V.S.
“Efficiency is doing BETTER what is already being done”
Client Name
Automation -EPA
Why?
 Reduce amount of paper exchanged between distributors and manufacturers  Streamline and standardize processing rules for distributers
 ‘One‐to‐many’ industry wide agreement (EPA)
 Improved end‐to‐end processing time
 Reduce transaction processing costs for the industry
Client Name
Automation -EPA
Fund Companies:
AGF Management, Castlerock Investments CI Funds, CIBC Asset Management, CIBC Securities, CI Investments, Dynamic Mutual Funds, Fidelity Investments Canada, Franklin Templeton Investments, Harmony, Invesco Canada
Mackenzie Financial, RBC Funds, SunLife Global Investments
Dealers:
Assante, Dundee, Portfolio Strategies, Qtrade
Offshore Funds
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Customized service offering to meet the needs of select group of FundSERV customers
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Allows offshore fund manufacturers (10) access to Canadian broker/dealer distribution to offshore clients
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Allows Canadian broker/dealer access to offshore fund manufacturers
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Canadian broker/dealer responsible for compliance (e.g. Client is domiciled offshore and is eligible for funds)
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Via NSCC Mutual Fund Services
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FundSERV is a member of the DTCC as a Third Party Provider (TPP)
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Multi‐currency: USD, Euros and pounds “People can have the Model T in any color ‐
so long as it's black.”
Summary
FundSERV’s mission is to reduce your time, cost & risk
1. GICSERV: operational time, cost & risk
2. FUNDcom & NFU: labour time & cost
3. FundFacts w/ integrated confirm: distribution cost