Transactional Exemption Module
Reduce fund expenses and preserve shareholder value by identifying exempt transactions through an automated solution which provides control of omnibus blue sky reporting from sub-accounting systems.
Many Financial Intermediaries have begun to favor and transition from use of networked accounts held on the Transfer Agent (TA) to use of separately managed sub-accounts that roll-up to omnibus accounts on the TA. As a result, the transparency previously available to the TA at the account level dissolves. With the loss of transparency, the savings from transactional exemptions that are employed by funds to mitigate overpayment of blue sky fees go unrealized. Reliance on these transactional exemptions is vital to the expense management of the fund as these exemptions reduce the reportable sales thereby reducing the corresponding filing fees and ensuring preservation of shareholder value. Without access to detailed data, Mutual Funds will pay higher notice filing fees than necessary.
The NRS Solution
Blue Sky Solution™ Transactional Exemption Module restores the transparency to omnibus accounts. It gives control back to the Fund by applying user configured rules to existing Rule22c-2 transaction and account position data to generate daily sales reporting feeds to a bluesky reporting system. The data provides account and transaction details necessary for the rules to systematically identify and filter out transactions eligible for exemption while reporting all required transactions. The benefit of these exemptions would otherwise be lost through omnibus reporting. This solution reduces costs through the apportionment of appropriate fees allowing for tighter blue sky reporting controls which result in preservation of shareholder value.
The Transactional Exemption Module:
- Reduces fund expenses and preserves shareholder value by maximizing recognition of transactional exemptions to reduce Mutual Fund sales based notice filing fees
- Enables fund companies and third party administrators to identify investor purchases that are exempt from blue sky reporting
- Allows a fund to repurpose existing data used in compliance monitoring against frequent trading by investors, to be used for compliance with blue sky regulations which cover the offer and sale of securities in a particular state
- Enables users to set up rules that systematically identify eligibility forthe range of states’ exemptions
- Can be implemented for some or all Broker-Dealer omnibus feeds of a fund complex over a period of time, it does not require an “all or nothing” approach to implementation
- Eliminates the need for time-consuming, manual research of large trades by systematically identifying transactions in accounts that areeligible as sales to “institutional investors”
- Is a valuable add-on to NRS’s Blue Sky Solution or NRS’s Blue Sky Administration services