Advent Software, Inc. (NASDAQ:ADVS), a leading provider of software and services for the global investment management industry, announced today that it has teamed with SunGard, to address cost basis reporting requirements with enhanced FIX messaging via Advent's Moxy® trade order management system (OMS).
Part of the Emergency Economic Stabilization Act of 2008, cost basis reporting requirements call for financial custodians to report adjusted cost basis information to the IRS. The cost basis reporting requirements went into effect on January 1, 2011 for equities, which must be reported on the Form 1099 in 2012. For investment management firms with a tax-sensitive trading strategy, the ability to include tax lot information on their trades is a mission critical component of their workflow.
For clients using Moxy®, Advent's industry-leading OMS, the enhanced FIX messaging extends the capabilities of the tax-sensitive engine at the core of Moxy®. Historically, Moxy® users have had the ability to select tax-optimized closing methods for their portfolios, but lacking an automated way to communicate this selection to custodians, closing methods would sometimes differ from what their custodians offered.
Now, through its relationship with SunGard Global Network (SGN) Securities, Advent offers a straight-through-processing workflow from Moxy® to support transmission of Versus Purchase (VSP) information on the FIX allocation message and which can be used to specify tax lots when closing out positions. Together, Advent and SunGard's connectivity help improve automation of key trade lifecycle components including electronic order routing, broker allocations, confirm/affirm and custodian bank notifications, helping to minimize risk and costs associated with trading.
"Ongoing collaboration with other industry leaders is important to our ability to develop relevant, robust solutions for our clients," said George McLaughlin, a Senior Director at Advent. "The cost basis reporting requirements represent a new challenge for the industry to stay synchronized at the individual tax lot level. Together with SunGard, we have met that challenge."
"SunGard is very proactive in helping customers prepare for upcoming regulatory obligations," said Raj Mahajan, president of SunGard's global trading business. "Our goal is to utilize strong relationships to help our customers capitalize on change and stay competitive in this evolving regulatory environment. SGN Securities and Advent help customers by providing a service that supports portfolio management with cost basis specifications, as well as route orders, allocate to specific accounts and manage FIX connectivity requirements with minimal configuration."