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Fund Setup changes in ESG Standards version 15

Recent updates to ESG Standards V15

Future Standards release dates

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By Dominic Ionadi

The conversion of the Transaction Forwarding System (TFS) from fixed-length records to XML-based data standards is one of the most significant upgrades in the history of ESG standards. FundSERV customers have allotted extensive resources in order to successfully implement this change. Proper planning is critical to successfully meeting the October 12, 2004 implementation date. To support the scope of this project, one full year has been provided between standards publication and implementation — more than twice the amount allowed for previous releases.

As with any major IT undertaking, there are inherent risks. In line with its mission of reducing risk in the investment fund industry, FundSERV is building a translation service that converts ESG v14 data to v15 XML format and vice versa. The application provides customers with a contingency plan in the event they unexpectedly miss the implementation date. This ensures that all customers can continue to do business on the FundSERV network even if their XML upgrade is delayed. Without this service, customers unable to transact electronically would incur a substantial increase in operational costs in order to process all of their investment fund transactions manually. In general, a manually processed transaction costs more than ten times the amount of a transaction placed on FundSERV. A large fund company missing the implementation date by even one week could see their processing costs increase by more than half a million dollars. This assumes their transaction volumes would not decrease because of the lack of availability on FundSERV. The conversion tool mitigates the financial and business continuity risks associated with a delay in customer ESG v15 readiness.

How it works

The service converts ESG v14 fixed-length order, response and inquiry records to ESG v15 XML format and vice versa. Customers that require the service will be charged a premium on their monthly FundSERV invoice. A permission system at FundSERV between customers will determine when records are passed through (XML to XML) or translated (one or both partners are non-XML). Since FundSERV TFS will store records in XML format only, even scenarios where both partners are non-XML require translation. Because of the overhead required for conversion processes, interactive order processing for translation customers will not be available. The conversion tool will operate in batch mode only. Most importantly, translation support is temporary — it will only be available until the subsequent standards release (ESG v16, June 2005).

For more details on the Translation Service, please contact FundSERV at 1-800-267-3526.

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