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Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC.

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Presentation on theme: "Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC."— Presentation transcript:

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2 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. SEC Rule 22c-2 SEC Rule 22c-2 Matrix’ Support of and Planned Compliance with the Rule

3 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. What Led to Rule 22c-2? In March 2005 the SEC adopted Rule 22c-2 in an effort to deal with market timing concerns. In March 2005 the SEC adopted Rule 22c-2 in an effort to deal with market timing concerns. The Rule specifically addresses the imposition and treatment of redemption fees. The Rule specifically addresses the imposition and treatment of redemption fees. It requires that each mutual fund’s board must either It requires that each mutual fund’s board must either Approve a redemption fee, or Approve a redemption fee, or Determine that a redemption fee is either not necessary or not appropriate. Determine that a redemption fee is either not necessary or not appropriate.

4 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. Rule 22c-2: Requirements Regardless of whether a fund imposes a redemption fee, the fund will be required to enter into a written agreement with each “Financial Intermediary”. Regardless of whether a fund imposes a redemption fee, the fund will be required to enter into a written agreement with each “Financial Intermediary”. The agreement must include language whereby the Financial Intermediary agrees to: The agreement must include language whereby the Financial Intermediary agrees to: Provide the Tax Identification Number of the shareholder upon request from the fund along with the amounts and dates of the shareholder’s transaction(s). Provide the Tax Identification Number of the shareholder upon request from the fund along with the amounts and dates of the shareholder’s transaction(s). Execute any instructions from the fund to restrict or further prohibit the shareholder’s activity that violates the polices of the fund. Execute any instructions from the fund to restrict or further prohibit the shareholder’s activity that violates the polices of the fund. The Rule is scheduled to go into effect October 16, The Rule is scheduled to go into effect October 16, 2006.

5 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. Rule 22c-2: Points of Concern Fund Agreements Fund Agreements The Rule did not address the “Chain of Intermediary Situations” whereby Matrix was not identified as a type of intermediary. The Rule did not address the “Chain of Intermediary Situations” whereby Matrix was not identified as a type of intermediary. Without a change to the definition of a Financial Intermediary, Matrix’ customers would be forced to execute new shareholder information agreements with each mutual fund they do business with. Without a change to the definition of a Financial Intermediary, Matrix’ customers would be forced to execute new shareholder information agreements with each mutual fund they do business with.

6 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. Rule 22c-2: Matrix Responds Matrix has been in communication with the ICI and took the lead in a campaign to change the definition of a Financial Intermediary. Matrix has been in communication with the ICI and took the lead in a campaign to change the definition of a Financial Intermediary. It is expected that the SEC will give mutual funds the discretion to allow Matrix to sign these agreements in its role as trading agent for the Financial Intermediary as that term is defined in the rule. It is expected that the SEC will give mutual funds the discretion to allow Matrix to sign these agreements in its role as trading agent for the Financial Intermediary as that term is defined in the rule.

7 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. Rule 22c-2: Data Reporting Requirements All requests for information by the mutual funds will be received by Matrix for accounts where we are listed as trading agent. All requests for information by the mutual funds will be received by Matrix for accounts where we are listed as trading agent. Matrix will notify each client when a request for underlying account information is received. Matrix will notify each client when a request for underlying account information is received. The data for the funds is housed in Matrix’ clients’ trust accounting and/or recordkeeping systems. The data for the funds is housed in Matrix’ clients’ trust accounting and/or recordkeeping systems. Clients’ system vendors should begin making the necessary enhancements to allow this data to be transmitted to Matrix. Clients’ system vendors should begin making the necessary enhancements to allow this data to be transmitted to Matrix. Matrix will provide electronic delivery of this data to the funds via the NSCC. Matrix will provide electronic delivery of this data to the funds via the NSCC.

8 Matrix Settlement & Clearance Services, LLC is a wholly owned subsidiary of MG Colorado Holdings, Inc. Affiliates include: MSCS Financial Services, LLC (a subsidiary of MSCS and a member of the NASD & SIPC); MG Trust Company, LLC; MG Advisory Services, LLC; and Optech Systems, Inc. Next Steps Occasional updates will be provided through future web cast presentations on our website. Occasional updates will be provided through future web cast presentations on our website. Our annual client conference (August 13-16) will feature a panel discussion of Rule 22c-2 including industry experts. Our annual client conference (August 13-16) will feature a panel discussion of Rule 22c-2 including industry experts.


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