Industry-wide testing begins for MAS Portal powered by Peridrome
UBS to launch test of DTCC’s Managed Account Service Web Portal
Economic Downturn Not Slowing Need for Industry Standardization
Crystal Bueno (212) 855-5473
Bari Trontz (212) 855-4825
New York, NY, September 10, 2009 – The Depository Trust & Clearing Corporation (DTCC) announced today that UBS Financial Services, the third largest sponsoring broker/dealer of managed accounts in the U.S., is preparing to launch a test, with several investment managers (IMs), of DTCC’s Managed Accounts Service and the recently introduced MAS Portal.
With no investment in technology, IMs using the Web-based MAS Portal can immediately begin to realize the benefits of standards-based messaging provided by the Managed Accounts Service. And both IMs and sponsors will be able to handle growing account volumes without increased cost, invest customers’ funds more quickly, and lower their operational risk.
DTCC’s Managed Accounts Service was created on the same principle as those offered by other DTCC subsidiaries: an industry-level platform, using open architecture, accessible to all, that is supported by the corporation’s existing, secure, proven global infrastructure.
The Service operates as a central communications infrastructure, allowing IMs, program sponsors and service providers to electronically exchange information throughout the life of a managed account through a single link. By eliminating redundant and expensive proprietary connections, the economics of the product are immediately improved.
“One of the biggest issues for an investment manager is that every broker/dealer they work with has their own system, or their own way of doing business, so obtaining information on accounts is difficult and lengthy,” said Marianne Leone, UBS Financial Services Inc. executive director. “Standardizing the process will be an incredible benefit for all participants and remove significant operational expenses.” UBS joined DTCC’s Managed Accounts Service last October.
“UBS’s commitment to launch this test is a welcome endorsement of a true industry solution that we’ve been working on for quite some time,” explained Ann Bergin, managing director and general manager, DTCC Wealth Management Services. “We are optimistic that UBS’s adoption of the hub and the MAS Portal will help them and their investment manager partners conduct business much more effectively. As the efficiencies become tangible, I expect the momentum to build.”
Dawn Christensen, Operations Manager at Wells Fargo Funds Management LLC, explained: “From the investment manager perspective, we see some important benefits to being part of this early test. It gives us an opportunity to help shape the new technology and by standardizing workflow management through DTCC’s new tool, we believe both our efficiency and quality service measures will improve.” Wells Fargo currently has slightly more than 30 investment strategies on over 30 sponsor platforms.
The Money Management Institute (MMI), the trade organization for the professionally managed investment solutions industry, has been strongly supportive of DTCC’s efforts to bring efficiencies into the managed solution industry, but factors such as uncertainty about doing business differently and recent market volatility have slowed uptake. However, according to Christopher L. Davis, president of MMI, “The decrease in assets in managed accounts as a result of the overall market decline has shed a brighter light on the industry’s operational problems, which are the very problems that DTCC has a reputation for solving.”
“This can be a highly profitable business,” Davis continued, “but, the squeeze on margins caused in part by the need to support multiple proprietary applications really began to show. The industry will benefit from a centralized infrastructure.”
“We all have our unique benefits, from the sophistication of our investment programs to the expertise of those individuals running our programs. But I don’t believe that operations is a differentiating factor,” Leone added. “If the engine isn’t running well, you can have the greatest products in the world, and they won’t succeed. However, when information exchange becomes standardized, it creates an industry that’s much more cohesive and much more scalable.”
Testing in Stages
The first stage of the test will include transmitting messages related to account openings, trade authorizations, trade acceptances and rejections, restrictions, terminations, deposits, withdrawals and trade activity between UBS and their IMs.
During the second stage UBS will use MAS Portal in parallel with its existing proprietary system – UBS Manager Link – feeding information into both and then comparing the data.
When the test ends in January 2010, UBS plans to migrate to the MAS Portal with those IMs who have committed to go live with the portal. UBS expects to retire Manager Link once its IM partners have converted to the portal.
Investment Manager Testers
Among the investment manager firms who will test with UBS include: Neuberger Berman LLC*; Wells Fargo*; UBS Global Asset Management*; Oak Ridge*; Dreyfus; Eagle Asset Management; Flippin, Bruce & Porter; Franklin Templeton Investments; Invesco; Thornburg Investment Management Inc.; and Moody Aldrich Partners.
UBS currently has business arrangements with 173 investment managers in their single and dual contract managed account programs.
About MAS Portal
MAS Portal is a web-based application that uses Peridrome Corporation’s DashWM service automation platform as its underlying technology. Using a digital certificate issued to users by DTCC, IMs will connect to MAS Portal through DTCC WebDirect, an interface that gives participants secure, direct access over the Internet to services provided by DTCC's subsidiaries. MAS Portal provides a dynamic, real time interface for investment manager personnel to review, confirm and process incoming client requests received as standardized messages. Users will also be able to download data extracts through the portal for use with their down-stream systems, including portfolio accounting application systems, customer relationship management systems and compliance application systems.
The Managed Accounts Service and the MAS Portal are provided by DTCC Solutions LLC, a subsidiary of DTCC.
About Wealth Management Services
Wealth Management Services is a business unit of DTCC that provides transactional and information services to the mutual fund, managed accounts and alternative investment products industries. These services automate, standardize and streamline the processing of transactions and data exchange between asset managers and their networks of distribution partners.
The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products. DTCC's depository provides custody and asset servicing for more than 3.5 million securities issues from the United States and 117 other countries and territories, valued at $27.6 trillion. In 2008, DTCC settled more than $1.88 quadrillion in securities transactions. DTCC has operating facilities and data centers in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.
Headquartered in Zurich and Basel, Switzerland, UBS is a global firm providing services to private, corporate and institutional clients. Its strategy is to focus on international wealth management and the Swiss banking business alongside its global expertise in investment banking and asset management. In Switzerland, UBS is the market leader in retail and commercial banking.
Peridrome Corporation offers leading providers of wealth management services strategic and tactical analysis, technical expertise, and software solutions that enable them to build operational scalability, increase business efficiency, and improve the customer experience of the investors they serve. For more information on Peridrome, visit www.peridrome.com.