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 over blue sky reporting back to the Fund by applying user configured rules to existing Data Share Activity and 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 that are not blue sky reportable and those transactions that are eligible for exemption from blue sky reporting, while categorizing and reporting all required transactions that represent the reportable blue sky sales. The accuracy of reporting is improved by removing the “middle man” and the benefit of the 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 and improved accuracy in blue sky reporting.
The Transactional Exemption Module:
- Allows a fund to repurpose existing data used in compliance monitoring for frequent trading activity, to facilitate compliance with blue sky reporting in conjunction with the offer and sale of securities in a particular state
- Eliminates the need for “inception-to-date” files from intermediaries by replacing them with output files that have been created using a rules engine to catalog transactions as reportable or exempt
- Provides complete transparency to blue sky sales activity and greater accuracy in blue sky reporting by eliminating the need for complicated processes required to maintain “inception-to-date” files.
- Enables users to set up rules that systematically identify eligibility for the range of states’ exemptions
- Reduces fund expenses and preserves shareholder value by maximizing recognition of transactional exemptions to reduce Mutual Fund sales based notice filing fees
- Can be implemented to replace one, two, some or all of your Broker-Dealer omnibus feeds over a period of time it’s not an “all or nothing” approach
- Eliminates the need for time-consuming, manual research of large trades by systematically identifying transactions in accounts that qualify as sales to “institutional investors” or “accredited investors”
- Is a valuable add-on to NRS’s Blue Sky Solution or NRS’s Blue Sky Administration services