1. Mutual Fund Services: Sharing Our Solution
Cecilia Humphrey
Americas Representative

2. 25 Years’ Collaboration with the Funds Industry
Supporting the Mutual Fund industry’s explosive growth since the early 1980’s
Introduced automation, replacing the paper-intensive processes that were impeding industry expansion and causing serious risk
Evolved communication from fax, phone and “snail mail” to internet and other communication networks
Developed an industry-led product – working groups (Firms and Funds) created an industry standard
Now in its 25th year supporting the Mutual Fund industry 2

3. Recently Renamed: Wealth Management Services
Continuing catalyst for dramatic expansion of the business relationships that exist in the mutual fund world
Our sole focus as a neutral processing hub is to serve the needs of customers and safeguard the integrity of the financial markets
Connecting a vast network of fund companies, transfer agents, broker/dealers, banks, trusts and other financial services firms that offer mutual fund investments to the market, including dealers to 45,000 funds: 40,000 US funds + 5,000 are European UCITS.
We work in partnership with the industry to develop cutting edge solutions in automated, standardized, centralized services via a single interface to market participants.

4. Fund/SERV Replaced the past fax-intensive, ad hoc steps, expensive…..
Firm
“A”
Firm
“B”
Firm
“C”
Firm
“D”
Replaced the past fax-intensive, ad hoc steps, expensive…..
Fund
“A”
Fund
“B”
Fund
“C”
Fund
“D”
Firm
“A”
Firm
“B”
Firm
“C”
Firm
“D”
…with DTCC Fund/SERV:
standard, comprehensive,
automated, safe, low-cost
DTCC
Fund/SERV
Fund
“A”
Fund
“B”
Fund
“C”
Fund
“D”

5. Fund/SERV 2011 40,000 US Funds 5,000 UCITS Funds
Note: Fund/SERV® is a registered trademark.
Daily Average Transaction Volume
737 Fund Families:
327 Firms
Price
40,000 US Funds 5,000 UCITS Funds
U.S. Mutual Fund Industry Total Net Assets (Trillions of dollars) 5

6. DTCC’s Settlement Bank in UK
DCV – DTCC Partnership
DCV Participant A
DTCC Fund/SERV
US Funds
Offshore Funds
(European)
DTCC
Settlement
DCV Participant B
Planned for 2011
DCV Participant C
DCV’s Settlement Bank
for NSCC/DTC
In USA
DTCC’s Settlement Bank in UK
DCV Settlement Bank

7. DCV -DTCC Mutual Fund Services
Order entry, Cancellations, Confirmations
22 Hours a Day available via PC Web
Networking
Updates events that affect positions
Dividends
Commission Settlement
Commission & Rebates Settlement Details, Summary and Reports
Profile (Price & Rates)
Mutual Funds price and rates information

8. Core Mutual Fund Services
Networking
Commission Settlement
Mutual Fund Profile Service
An industry standard for automating and streamlining all aspects of mutual fund processing via a centralized infrastructure
Increased operational efficiency resulting in risk reduction
Cost per Fund/SERV transaction in 2011= USD

9. Fund/SERV Orders Mutual Fund Fund/SERV®
Input, confirmation, settlement, registration
Mutual
Fund
Order
Order
Confirmation
Confirmation
Correction
Correction
Fund/SERV®
Settlement Detail
Settlement Detail
Settlement Summary
Settlement Summary
Registration
Registration
Registration Acknowledgement
Registration Acknowledgement

10. Fund/SERV’s Service in US
Fund/SERV Service Flow
Brokers and Banks
40,000 US Funds
DTCC Fund/SERV
5,000 Offshore Funds e.g., Luxembourg, Dublin
DTCC
Settlement
Pending regulatory approval:
UK and Euro Settlement
US Brokers’ and Banks’
Settlement Banks
for NSCC/DTC
In USA
DTCC’s
UK/Euro Settlement Bank
US Brokers’ and Banks’ UK/Euro
Settlement Banks

11. Networking
(updates, balances client records between broker and fund)
Extends the power of Fund/SERV from transaction processing to asset servicing. Allows mutual funds and brokers to exchange all other account information including:
Account Position Information
Dividend Processing
Account Maintenance Reconciliation
Transfers
Year-end Reporting
Activity Reporting

12. Networking Mutual Fund Networking Benefits both firms and funds
Single connection for information exchange
Standardized information
Eliminates duplicate systems
Information flow from Funds
Mutual
Fund
Activity
Activity
Dividends
Dividends
Settlement
Settlement
Networking
Account
Maintenance
Account
Maintenance
Positions
Positions
Year-End
Processing
Year-End
Processing

13. Commission Settlement
A centralized hub for processing and paying/receiving commission payments
Multiple types of mutual fund commissions
Simplified, automated reconciliation
Centralized money settlement into a single daily settlement figure
Payment flexibility (daily, weekly, monthly)

14. Commission Settlement
(Sometimes Known as Rebate Settlement)
Commission
Settlement
Mutual
Fund
Commission Detail
Commission Detail
Commission Settlement
Commission Summary
Commission Summary
Networking
Features
Conversion Processing
Activity Reporting
Position Reporting
Account Maintenance/Reconciliation
Dividend Processing
Year End Processing
Settlement
Settlement

15. Commission Settlement The Standard Process
Commission Settlement (Monday – Saturday) from 12 a.m. to 2 p.m. Fund companies electronically transmit commission data for processing and forwarding to firms
Distributors receive automated and standardized files containing detail and summary commission data
At 3 p.m. the day before settlement, NSCC notifies both fund companies and distributors of their commission settlement obligations
Commission settlement obligations are netted
with other Mutual Fund Services

16. Mutual Fund Profile Security Database
Approximately 140 Fund Companies have populated Mutual Fund Profile
Over 21,000 CUSIPs are available
Over 250 Data Points for each CUSIP is available to Firms. Data includes information such as:
Breakpoints
Linkage Rules
Characteristics and Investment Objectives
Share-class Definitions
Minimum and Maximum Restrictions on Purchases and Redemptions
Additional data elements have been identified by Fund and Firms.
Expansion of Profile to support Retirement business needs (401k market)
Comparison Tool

17. DCV Membership and Sponsorship
Individual NSCC
Accounts under DCV’s sponsorship
NSCC Member/ #2735
DCV
DCV Participant A
DCV Participant B
DCV first became an NSCC Member – Participant # 2735.
DCV is working with a pilot group of Chilean firms seeking to trade UCIT funds via Fund/SERV.
NSCC will assign DCV individual account numbers for each member using the service, in the members’ names.

18. DCV’s Fund/SERV Process Flow
U.S. Funds,
European Funds
(UCITS)
Orders
Orders
DCV
Participant A
Confirms
Confirms
Settlement file info
Orders
DCV
Participant B
Settlement
obligation
Confirms
Settlement file info
Net Settlement-
Obligation
DCV NSCC Acc
DCV Participant will submit orders using ‘PC Web Direct’ and will see only its own reports and activities including settlement information, and DCV can monitor and support.
Funds confirm orders back. DCV’s sponsored members will access these confirms via PCWeb Direct HTML report facility.
DCV will settle the cash obligations with NSCC across all its sponsored members’ accounts. To DCV, this will be a net
settlement with NSCC.

19. DCV Fund/SERV Money Settlement Flow
Net

20. Another Model: Third Party Provider (TPP)
The TPP will act as a routing platform that will link the TPP’s customers to Fund/SERV. This will allow the TPP’s customers to gain automated access to US and offshore funds eligible for Fund/SERV.
The TPP sub-contracts with another NSCC participant to take settlement responsibility.
Member #1
DTCC Fund/SERV
NSCC
Fund/SERV
TPP
(e.g., Market Infrastructure / CSD as TPP)
Member #2
DTCC
Settlement
Member#3
NSCC Member
Member’s Settlement Bank

21. Questions Does your organization provide services to Mutual Funds?
Are there any current Mutual Fund Services initiatives in your market?
Locally? Off-shore?