BNY Mellon automates process for broker-dealers
15 October 2015 New York
Image: Shutterstock
BNY Mellon has automated the notifications that broker-dealers send to mutual fund complexes when large trades in their funds are imminent.
Fund complexes require advance notification of large trades so they can manage their cash flow efficiently. The fund managers require cash when broker-dealers sell shares in mutual funds.
The managers also need to prepare for the cash inflows that result when broker-dealers buy shares in the funds on behalf of their investors.
Prior to the introduction of the new service, broker-dealers would alert the transfer agent by phone or email that the trade would be coming, and the transfer agent would then contact the mutual fund manager.
Under the new system, the broker-dealer signs in to the BNY Mellon AdvisorCentral web portal and provides detailed information about the upcoming trade, including the expected trade date, trade amount, and the trade settlement timeframe.
Michael DeNofrio, managing director and global head of transfer agency services at BNY Mellon, commented: “This automation process reduces the communications period for the broker-dealers and the fund complexes, lowers the probability of an error, and streamlines the overall process.”
“The industry need for automating this process has become more acute as mutual fund complexes have been lowering the threshold for requiring advance notification. In the past, advance notification was required for trades of at least one million dollars. Now, we are seeing fund complexes ask for advance notification for trades in the $100,000 range.”
Fund complexes require advance notification of large trades so they can manage their cash flow efficiently. The fund managers require cash when broker-dealers sell shares in mutual funds.
The managers also need to prepare for the cash inflows that result when broker-dealers buy shares in the funds on behalf of their investors.
Prior to the introduction of the new service, broker-dealers would alert the transfer agent by phone or email that the trade would be coming, and the transfer agent would then contact the mutual fund manager.
Under the new system, the broker-dealer signs in to the BNY Mellon AdvisorCentral web portal and provides detailed information about the upcoming trade, including the expected trade date, trade amount, and the trade settlement timeframe.
Michael DeNofrio, managing director and global head of transfer agency services at BNY Mellon, commented: “This automation process reduces the communications period for the broker-dealers and the fund complexes, lowers the probability of an error, and streamlines the overall process.”
“The industry need for automating this process has become more acute as mutual fund complexes have been lowering the threshold for requiring advance notification. In the past, advance notification was required for trades of at least one million dollars. Now, we are seeing fund complexes ask for advance notification for trades in the $100,000 range.”
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