Category: Compliance, Creating Future Value, Industry Trends

Prepared for Whatever Comes Next: Creating future value in compliance programs

By


Thought leadership is more than marketing jargon at Boston Financial. For us, thought leadership tells the story of what we think about changes in the industry, and what we are doing about them.

Boston Financial’s Creating Future Value series will discuss how we are responding to industry megatrends by moving away from the classic, transaction-driven transfer agent model in favor of a smart servicing model that positions clients for growth in the changing economy.

Follow this monthly series by subscribing to Boston Financial’s Perspectives blog.

_____________________________________________________________________________

Money market reform (MMR), FATCA, Blue Sky, and unclaimed property administration. These are the hot button issues in compliance programs – with every asset manager and intermediary paying close attention to how the changes in the rules will affect operations and ultimately, fund performance.

This is not news.

The classic transfer agent systematically prepares for reform by analyzing system requirements, building operational infrastructure, training staff, and collaborating with clients to ensure they are ready when reforms go live. Also not news. You’ve read dozens of blog posts, participated in several webcasts and advisory meetings, and downloaded pages of content from Boston Financial on these and other regulatory changes. You expect us to be ready for evolution in the environment, and we will be.

Compliance-Mountain

But Boston Financial is more than a classic transfer agent. We are a smart servicer. And this means we are also looking at the compliance landscape holistically. We do this so we can anticipate what federal and state regulatory bodies will ask of our clients so we can lay the groundwork for them and minimize opportunity cost to their core business.

Of course, we don’t have a crystal ball, or even a low-budget magic 8 ball, telling us what’s coming down the regulatory pike. But, from our vantage point at the table with industry organizers like the ICI and NICSA, we do know that the “next big thing” that shakes up the industry will likely be driven by regulators’ call for more transparency in order to continue to build consumer trust in the market.

How do we know this? Key provisions of both FATCA and MMR seek to distinguish between institutional and retail account activity with the goal of increasing transparency. Myriad omnibus reforms are trying to shed a light on account detail obscured through the transition to subaccounting by intermediaries. AML beneficial ownership rules clarification? Again transparency as FinCEN and other regulators seek to understand who is benefitting from the movement of monies through the U.S. mutual fund industry.

While Boston Financial doesn’t yet know what will come after MMR, we are confident that transparency is the name of the game. This is why we are laying the groundwork to open a secure data window for clients, making it possible for them to answer potential future questions about account activity and performance. This includes looking closely at underlying account data available to determine what detail is available, and how it might be cleaned and repurposed to serve future compliance reporting needs. In parallel, we are exploring strategies for streamlining the due diligence process through Compliance Corner and enhanced educational programming for fund boards.

The transfer agent industry is often criticized for being too reactive. This is no longer good enough given the intensity of the regulatory push. In looking ahead, we are shortening product and technology development cycles so our clients are prepared for whatever happens next in the compliance space. This is smart servicing in the 21st century.

_____________________________________________________________________________

Read other blog posts in the Creating Future Value series:

The Impact of Megatrends to the Transfer Agent Model

Have It Your Way: Meeting the Needs of Empowered Consumers

Looking at the Big Picture: Leveraging the power of data

Facing Industry Challenges Together

Craig Hollis

Craig Hollis

Craig joined Boston Financial in July of 2004. Craig has 32 years of mutual fund transfer agency experience in which time he has been responsible for managing numerous operational and support groups including: financial control, transfer agent and blue sky compliance, tax reporting and withholding, intermediary compensation, transaction processing and offshore distribution and servicing. Craig is currently responsible for the regulatory oversight of Boston Financial’s Transfer Agent activities as well as all operational aspects of Boston Financial’s compliance program including a 22c-2 full service solution and Blue Sky administrative services. Additionally, Craig represents Boston Financial in periodic Regulatory Compliance Advisory Group Sessions (RCAG) and is active in the industry, serving on the ICI Transfer Agent Advisory Committee, ICI Abandoned Property Task Force, ICI State Related Issues Working Group, ICI subcommittee on Money Market Reform (Institutional vs. Retail), NICSA Compliance Risk Committee, the Securities Transfer Association and has been a speaker at numerous industry events.

Comments

Your comments mean a lot to us. We want to hear your perspectives, but please know that this section is being moderated and we reserve the right to edit or delete content at our discretion. Please keep your comments respectful and relevant.

+ Post a comment

Your email address will not be published. Required fields are marked *