Source: Thomson Reuters
Thomson Reuters, the world's leading supplier of intelligent information for businesses and professionals, today announced the launch of the first end-to-end brokerage processing solution for alternative investment products (AIPs).
Through a collaborative agreement with the Depository Trust & Clearing Corporation (DTCC), Thomson Reuters has designed the first service bureau processing solution to allow broker-dealer firms to manage the submission of orders for non-traded real estate investment trusts (REITs), business development companies (BDCs), dividends, commissions and settlement processes through DTCC's AIP system and Thomson Reuters BETA Systems AIP platform (BETA).
Until now, managing trading and settlements for an alternative investment product has been labor-intensive. By integrating with DTCC's AIP service, Thomson Reuters' BETA Systems brokerage customers will benefit from a standardized and streamlined process, thereby mitigating risk for the broker-dealers and their advisors. Brokerage firms can benefit from more timely and accurate access to account position data, tax lot information and integrated statements.
"Technological advances coupled with a much needed knowledgeable personal touch are at the core of enhanced client service," said Eric Jones, global head of BETA product management at Thomson Reuters. "We are delighted to collaborate with DTCC to develop standards that meet a growing market demand for alternative investment products within the retail investing community."
Because DTCC's AIP platform is seamlessly integrated with BETA, any BETA service bureau broker-dealer firm can use the system to drive efficiency. Back office professionals can easily send and track customer information (i.e. registration data) to the AIP sponsor, submit and track client orders, process advisor/firm commissions and track the settlement process.
"We are pleased to work with Thomson Reuters to make their alternative investments processing system available to brokers and advisors," said Ann Bergin, DTCC managing director and general manager of Wealth Management Services. "It represents a critical first step in helping investors achieve their alternative investments goals with greater transparency and reduced costs."
DTCC subsidiary NSCC filed a rule amendment on March 7 with the Securities and Exchange Commission (SEC) pertaining to broker/dealers' custody and possession requirements for uncertificated alternative investments. The filing, which took effect immediately, marks a milestone because it allows DTCC's AIP service to offer an industry-wide solution that allows securities that are processed on AIP to be deemed in a good control location, further reducing cost and risk, which benefits all parties to these transactions.
The AIP system currently handles non-traded REIT and BDC (Business Development Companies) securities. Firms can manage other AIP security types, such as managed futures, hedge funds and private equity funds, but they will continue to be processed manually. Future enhancements include new features and functionality to process other AIP securities.