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By Dominic Ionadi

On October 26, 2009, FundSERV published a copy of version 20 (v20) of the FundSERV Standards to the industry. The publication followed an extensive and highly successful industry review and comment period, which began on August 4, 2009. During the comment period, customers and vendors had the opportunity to provide feedback and suggestions on the proposed standards.

As with every release of new standards, a number of enhancements are being introduced to support further automation of transaction processing and reconciliation within the investment fund industry. For v20, new standards for segregated funds and client name will enable considerable transaction volumes to be automated through FundSERV, significantly reducing the cost and risk associated with manual processing.

Version 20 Highlights

Segregated Funds Maturities

A new transaction process has been introduced to support maturity redemptions and corresponding top-up payments. Distributors can request maturity redemptions from segregated fund issuers up to 60 days in advance of maturity. The issuer provides the actual trade and settlement date for the next available maturity associated with the contract/account. Both the redemption and corresponding top-up guarantee, if applicable, will settle through N$M.

Changes to standards include:

• New Transaction Type value (M) and corresponding TrxnDtl section to identify maturities
  
  
• New Record Type value (GMT) for bulk maturity top-up payments via N$M
  
  
• Complete processing rules and edits for the new transaction

Client Name Automation

A number of updates have been made to support FundSERV's client name initiative, which allows for higher levels of straight-through processing for client name transactions.

Changes to standards include:

• Updated Account Setup edits that ensure proper beneficiary information is included with an initial purchase to a registered plan
  
  
• New element that allows manufacturers to accept EFT information for client name redemptions
  
  
• New "Documentation Required" field in the Settlement Instruction (AF) file that allows manufacturers to advise distributors about documentation requirements for the associated transaction

CUSIP Rollovers

A new Non-Financial Update (NFU) message has been added which allows for automated account setup and position reconciliation of instruments such as Limited Partnerships that are rolling over from CDS into investment funds.

Changes to standards include:

• New NFU CUSIP Rollover Request Business Process (CRR) message that provides Account Setup, CUSIP and position details
  
  
• New Rollover Unit Position (RUP) element identifies the expected unit amount for the rollover
  
  
• New Product/Event Indicator value (X) identifies the rollover transaction in the Transaction Reconciliation (AT) file

Return of Capital Reporting

Expanded processing rules and standards around the reporting of Return of Capital (ROC) distributions within the Transaction Reconciliation (AT) file have been added to support improved reconciliation and greater consistency across the industry.

Changes to standards include:

• New Product/Event Indicator value (U) to identify ROC adjustments

General Enhancements and Maintenance

• Additional fields in the Segregated Fund Supplementary Detail (AC/BL) files for the transmission of Lifetime Withdrawal Amount (LWA) information
  
  
• Removal of Recipient Code value 6
  
  
• Updated Product Type values in the Fund Setup (FD) file for non-security interest bearing product, principal protected note, and non-principal protected note
  
  
• New elements in the Fund Setup (FD) file to identify fund eligibility within TFSA and registered account types
  
  
• Updated validation rules for Social Insurance Number (SIN) elements to include an 'enhanced MOD-10 check'
  
  

For a complete list of changes in v20, review the 'What's New' section of the FundSERV Standards documentation:
https://standards.fundserv.com/secure/english/standards20/
whats_new.htm.

Questions about any changes in v20 can be sent via e-mail to FSStandards@fundserv.com.

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