- 1. The Money Management Institute Data Standards Committee 2nd
EditionSeparately Managed AccountsOperations Communications and
Data Standards Prepared by: Data Standards Committee The Money
Management Institute 2nd EditionSeptember 2005 Copyright 2005 The
Money Management Institute. All Rights Reserved.
2. The Money Management Institute Data Standards Committee 2nd
Edition Table of ContentsI.Executive
SummaryII.IntroductionIII.Separately Managed Accounts
IndustryIV.Plain EnglishA.Account SetupB.Account ActivityC.Account
MaintenanceD.Account NoticesV.AppendixA.Message Notification
FlowsB.Plain English GlossaryC.Standards StrawmanD.Table Codes (See
Microsoft Excel Document)E.Matrix (See Microsoft Excel Document)
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 2 of 68 3. The Money Management Institute Data Standards
Committee 2nd EditionEXECUTIVE SUMMARY: THE SEPARATELY MANAGED
ACCOUNT BUSINESS DRIVE FOR STANDARDSThe current quest for standards
in the Separately Managed Accounts (SMA) industry should be viewed
in its historical context. Most of the Investment Managers (IM) who
became involved in the business in its early stage of development
were Institutional Asset Managers who were interested in expanding
their product distribution to the retail networks of the major
Broker Dealers.The investment management business institutional
operating model was the one most Investment Managers were familiar
with. It depended on tri-party trade communications between
broker-dealers, Institutional Investment Managers and Custodians.
DTCC was the industry utility for communications. The standard was
electronic trade communications, interface, procedures and
agreements (ad-hoc).However, Institutional Managers were more
accustomed to low volume levels of new accounts, terminations,
external cash flows and client driven portfolio activity. They had
primarily tax-exempt clients, highly customized reporting,
sophisticated institutional consultants and distribution
channels.SMA Sponsors adopted the role of consultants in addition
to their traditional roles as broker-dealers and custodians. There
were no standard communications between Investment Managers and
Sponsors. There is no industry utility. The all-important account
life cycle communications are delivered via paper, fax or
proprietary electronic communications, depending on the Sponsor. In
addition, many Sponsors require Investment Managers to use Sponsor
specific trading and allocation generation platforms.The Sponsors
developed systems to accommodate multiple Investment Managers in
multiple investment styles. Many spent considerable resources on
trade entry, portfolio management and allocation generation
platforms to support each of the Investment Managers. In many cases
these systems are redundant to each other. They spent additional
significant resources, collectively, on Manager training, interface
maintenance, telecommunications, systems development and the IT
infrastructure to support each of the Investment Managers. Though
the industry has been relatively free of major trading errors, they
have had to manage market exposure when their systems do not
perform reliably.The typical Investment Manager involved in the
Separately Managed Account business now has adapted to this
infrastructure. Each IM participates in multiple Sponsor programs
and in multiple investment styles. They support multiple trading
and allocation Copyright 2005 The Money Management Institute. All
Rights Reserved. Page 3 of 68 4. The Money Management Institute
Data Standards Committee 2nd Edition generation front-ends. The
resulting staffing issues are significant. The learning curve for
new staff, coverage for vacations or illness and turnover are
challenges made exponentially more difficult by the use of these
multiple front-ends. Trade order management and best execution
standards must be managed with extreme care.The need to eliminate
operational drain created by the redundant development and
maintenance of these various interfaces is clear. Standardized data
formats and a central processing flow will reduce costs and
operational risks, thereby improving the quality of services. High
volume and critical communications will be categorized and content
must be standardized for fields of information, required vs.
optional data, aggregation elements, data definitions and standard
data formats.The Money Management Institute (MMI) Data Standards
Committee established a working group to focus on the development
of standard data communications between Sponsors and Investment
Managers. After many long meetings and conference calls, the first
edition (Version 1.1) of the MMIs Standards for Data Communications
was published in September 2002. The second edition published
herein encompasses additional data standards as well as revised
standards originally published in Version 1.1. Copyright 2005 The
Money Management Institute. All Rights Reserved. Page 4 of 68 5.
The Money Management Institute Data Standards Committee 2nd Edition
WORKING GROUP MEMBERS SECOND EDITION:The dedication of the
volunteers who have worked on this project and continue to work on
the development of the many additional data communication standards
is extraordinary. The spirit of cooperation and selfless commitment
of time and effort in this endeavor is truly remarkable. Attached
is a list of the active participants in this project. There have
been many leaders among the group who worked on several of these
important documents. To mention a few would slight the team that
has shown an outstanding resolve and persistence to produce the
results. The group in its entirety is listed below.PARTICIPANTS
Allen DionneAngela Pearson Bridget VaughnCheryl Cohen Christine
RogersDenean Williams Diane Murphy GoldsteinFabian Gomez Franois
Coeytaux Gib Veconi Greare Sutherland James Kiernan John AxisaJim
Quartuccio Lynn Zabner Liz Getter-Johnson Michelle Lazzara Curley
Mary Gentempo Nicole St. Pierre Nancy Camarata Renee Bowen Paul
Bucaoto Roger Stevens Rick Austin Stephanie Bream Sandra Fortier
Suzanne Akers Steve Semple Walter MakaruchaVinny Lepore William
ODellPARTICIPATING FIRMS AdvisorPort PFPCAIM Private Asset
Management, Inc. Bear StearnsBank of America CheckFree Investment
Services BISYS Davis AdvisorsCredit Suisse Asset Management
Franklin Templeton Private Client Group DTCC INVESCO Gartmore
Separate Accounts LLC LockwoodJP Morgan Asset Management Merrill
Lynch Investment Managers Lord, Abbett LLC Prudential
InvestmentsNuveen Investments SEI Investments Rorer Asset
Management LLC The Bank of New YorkState Street Wealth Management
Services UBS Financial Services Inc. The Money Management Institute
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 5 of 68 6. The Money Management Institute Data Standards
Committee 2nd Edition It is expected that the Standards will be
adopted by MMI members and SMA industry participants. As a
practical matter, Sponsors and Investment Managers should establish
realistic timetables to implement the Standards to provide improved
services to clients. As standards are adopted, it is anticipated
that middleware infrastructures will improve the operational
efficiencies of all participants. Copyright 2005 The Money
Management Institute. All Rights Reserved.Page 6 of 68 7. The Money
Management Institute Data Standards Committee 2nd Edition
INTRODUCTION:The purpose of this document is to describe, diagram
and define a standard set of data formats, operational and
communications process flows and message specifications for the
Managed Accounts industry. By defining and adopting these standards
the Separately Managed Accounts (SMA) industry will make
significant progress toward improving overall operational
efficiency. This document will serve as the SMA industry repository
for current and future standards.This edition of the Money
Management Institutes data and communication standards for the SMA
industry is the second in a multi-part plan aimed at standardizing
the operations communications between SMA business partners across
all operational functions. After publishing the first Standards
edition in late 2002, the Data Standards Committee on Standards
laid out a plan for publishing subsequent editions. Each subsequent
edition will include enhancements to existing standards as required
by the industry.Initially, the sub-committee has elected to
standardize the following processes:New Account ProfileNew Account
FundingNew Account Authorization to
TradeContributionDistributionTax Trading GuidelinesVoluntary
Corporate ActionsAccount TerminationInvestment RestrictionCustodian
ChangeFinancial Consultant/Team ChangesHalt Trading/Resume
TradingInvestment Manager Style ChangeClient Profile UpdateShort
Position or Debit Cash NotificationProxy Information Client
OverrideFee ReportingAdditional processes have been identified as
future standardization targets, and will be incorporated into this
document upon completion. Those identified are:Reconciliation
BillingMSPs TradingError reporting, processing and correction
communicationsPerformance reporting Copyright 2005 The Money
Management Institute. All Rights Reserved.Page 7 of 68 8. The Money
Management Institute Data Standards Committee 2nd Edition
SEPARATELY MANAGED ACCOUNTS INDUSTRY Separately Managed Accounts
(SMAs) evolved in the early 1970s from the defined benefit pension
funds market. E.F. Hutton formally introduced the first SMA in 1976
and was the sole provider for the next 10 years. The structure in
the early years was relatively simple. Sponsors acted as the
introducing intermediary, custodian and trade executor for the
investor. Investment Managers (IMs) interacted directly with the
client and provided asset management services in return for a fee
negotiated with the investor. In 1987, E.F. Hutton launched the
Select Managers program and assumed fiduciary, record keeping and
reporting responsibility. Fees and account minimums were
standardized, and the traditional consulting process assumed a
greater significance. This remains the predominant structure of the
SMA business today. The industry had approximately $576.1B1 in
assets under management (AUM) at the end of 2004. This includes all
SMAs. The industry is in a state of rapid growth. Financial
Research Corporation (FRC) projects that by the year 2008, assets
held in separately managed accounts will approach $1.3 trillion and
the total number of individual accounts will increase to 5.1
million. The SMA industry is faced with numerous challenges in the
technology and operations area. One key area of concern is the
potential scalability of the business due to a lack of standardized
protocols and processes. Achieving standardization is directly
correlated to the level of connectivity and the free flow of data
that exists between the Sponsors and IMs that serve the industry.
The current state of connectivity in the SMA world does not allow
for the efficient flow of this data as reflected in a study by
FRC.2 In the study, SMA Investment Managers identified the current
fractured operational environment as the single greatest challenge
they face today, and the quantitative research concurs by showing
that operations personnel/resources increase in direct correlation
to a firms' SMA assets and SMAs under management. While the
industry is growing rapidly, it is relatively small compared to
other financial products. SMA assets are dwarfed by the mutual fund
industry that has over $7.92 trillion in total assets under
management. From an operational perspective, the current state of
the SMA industry may be likened to the mutual fund industry some
twenty years ago. At that time, the fund industry defined the
standardized operational procedures and protocols that made it
scalable and profitable and allowed it to become the investment
product of choice for individual investors. Many believe that SMAs
have reached a similar critical point in their life cycle. 1 Money
Management Institute, February 1, 2005 2 Investment Company
Institute, February 24, 2005 Copyright 2005 The Money Management
Institute. All Rights Reserved. Page 8 of 68 9. The Money
Management Institute Data Standards Committee 2nd Edition
PARTICIPANTS Within the industry there are six categories of
participants that are described below. While these descriptions
attempt to neatly categorize each participant, in practice there
are actually many exceptions. For example, Sponsors are also often
IMs for both their proprietary and other Sponsors SMA products.
This blurring of roles is increasing as the industry continues to
evolve. Investors/Clients There is a wide range of investor types
with an increasing range in wealth. SMA programs now range in
initial account size from as low as $10,000 all the way up to $5
million (or more) with an approximate average size of about
$300,000. Investor types range from retail investors through
institutional plan sponsors. Financial Consultants / Advisers (FC)
Financial Consultants / Advisers (FCs or FAs as they are commonly
known) are the primary distribution for the SMA industry. Working
with the client, they help to define the clients needs, goals,
objectives and risk tolerances to determine the appropriate asset
allocation and investment style. Sponsors Sponsors are responsible
for the creation, maintenance, marketing and distribution of
separately managed account programs as enhanced services for their
clients. Sponsors can be wirehouses, regional firms, independent
broker/dealers, insurance companies, banks, etc. In some cases
Sponsors create the framework for the SMA program as a service
provider to another entity. They are responsible for ongoing due
diligence to determine the Investment Managers participation level
in their program. As such, they may be the primary investment
adviser with the ability to delegate discretionary powers to
sub-advisors (IMs). Investment Managers An Investment Manager (IM)
is a registered investment adviser under the Investment Advisers
Act of 1940 and has the power, delegated to it in writing, to
manage, acquire and dispose of assets in a clients account. In the
Separately Managed Account (SMA) industry, the IM is the provider
or manufacturer of the investment process for the client. They
generally create model portfolios based on a particular investment
style and risk tolerance. IMs may act as sub advisers, as part of a
master agreement with the Sponsor, serving as co-fiduciary on the
client account. Custodians Custodians are responsible for holding
the clients assets. The Custodian is often the same firm as the
Sponsor but may also be a third party such as a bank or trust
company. Copyright 2005 The Money Management Institute. All Rights
Reserved.Page 9 of 68 10. The Money Management Institute Data
Standards Committee 2nd Edition Service Providers Service Providers
accommodate the services that the participants require for SMAs.
Some of the services include operational outsourcing capabilities,
portfolio manufacturing applications (e.g. complete accounting
systems), trade order management, performance generation and report
writing capabilities. This may also include full security pricing,
sector coding and security restriction functionality. PRODUCTS The
SMA is composed of securities (which could include stocks, bonds,
mutual funds, commodities, etc.) representing a particular target
investment style, for example, large cap growth or small cap value,
that is selected based on a particular investors profile or
financial goals. This target portfolio is then managed according to
the investment style and securities are bought and sold in the
account consistent with that style. The fee for the SMA is usually
based on a percentage of the assets under management. The advantage
of this fee arrangement for the investor is that it is defined at
the inception of the account. As the SMA industry adds participants
and programs, the number of style categories will continue to
increase over what is described here. As the number and type of
categories increase, the variance in operations and processing will
also become more challenging to manage. The processes described in
this paper are designed to be as broad as possible in order to
support an increasing variation in product types. Some of the major
SMA products include the following: Separately Managed Accounts
currently supported by the Standards Retail The retail SMA is the
traditional account sold by FCs. The investment styles are
well-defined, e.g. large cap, small cap, etc. and based on an
investors risk profile. The primary investors are individuals.
Institutional The institutional SMA is geared towards corporations,
public and private entities, pension plans, etc. Tax Aware Accounts
The tax aware SMA is designed to consider an investors tax bracket
and investment goals and utilize time trading in order to limit tax
exposure. Multi-Strategy Portfolios Multi-Strategy Portfolios are
accounts that integrate multiple investment styles into a single
account or strategy, providing portfolio diversification (and
presumably less market risk). These SMAs usually have the Sponsor
act as the manager of managers, selecting investment styles, IMs,
and the allocations to those IMs as components of a single account.
Minimums for these accounts usually start at $100k and are targeted
at the high-end SMA investor. **The notifications in the current
edition partially support Multi- Strategy Accounts and will be
defined in its entirety in the next version.Copyright 2005 The
Money Management Institute. All Rights Reserved. Page 10 of 68 11.
The Money Management InstituteData Standards Committee2nd Edition
CURRENT PROCESSES The diagrams below illustrate the dominant modes
of communication between key players in the industry. The total
number of communication points equals the total number of
relationships between individual participants. SMA Industry3 3 P =
Program, C = Custodian Copyright 2005 The Money Management
Institute. All Rights Reserved. Page 11 of 68 12. The Money
Management Institute Data Standards Committee 2nd Edition SMA
Generic FlowFinancialConsultant/AdviserClient Interaction Evaluate
client info Determine suitability Create Profile Dedicated
Front-End Input Client Data Direct access to SponsorsSponsor
Programsystem Suitability Review Profile Back Office processing in
accounting system Establish Accounts Money Market Brokerage Web
Record keepingMail Account Activity E-mail Sends client investment
information to: Fax Web IM MailCustodianE-mail Financial Operations
FaxInvestment Manager Receives funds from ClientQuality Control
Check to Custodian, orReview and validate requirementsCustodianACAT
to Custodian Accept client Retains account infoInvestment
Administration Accounting Proxy record keepingSystem Facilitates
Client reportingDetermine asset allocations Holds physical shares
Cost Basis Re-balance allocations Web Determine buys/sells Trading
DeskMailE-mail Trading TeamExecutes orders FaxBundles orders sorted
by SponsorRecords order activity in accounting systemPlaces orders
with Sponsors trade desk The data currently flows among industry
participants via regular mail, telephone calls, faxes, email,
manual uploads and downloads and semi-automatic and fully automatic
interfaces. Because there is no standard communication protocol,
there is little efficiency. There are a large number of one-off
interfaces created in order to attain the current fragmented level
of automation. Considerable resources (both human and financial)
are spent on continuous re-designing and re-engineering business
processes in an attempt to be more fully automated and reduce
errors.Copyright 2005 The Money Management Institute. All Rights
Reserved. Page 12 of 68 13. The Money Management Institute Data
Standards Committee 2nd Edition BUSINESS INTERACTIONS The purpose
of this section is to describe the business interaction between
participants for particular processes. The primary assumption in
developing these descriptions is that these processes would be
implemented systematically and uniformly, eliminating the current
paper-based fax and postal mail exchange of information that is the
prevalent form of information exchanges between Sponsors, IMs and
Custodians. The basic approach to the process flow design and that
is integrated into the following descriptions are the following:
All message files from Sponsors to IMs will be followed by an
immediate acknowledgement that a Notification message was received.
The actual accept or reject message would be received at some later
time, the timeframe to be negotiated between IM and Sponsor, as to
whether the message is accepted or rejected. If the message
rejects, a Reject Code and a comment supporting the reject would be
sent to the initiator of the message. The message and flow
standards have been developed with the assumption that they will be
implemented electronically. Although these are defined as distinct
messages, it is possible that they could be combined into one
electronic message. Since this is the business layer of the
message, it should be assumed that the technology layer and the
protocol selected will handle message delivery, header/trailer
information, time stamps, etc. and are not described in this
document.SMA COMMUNICATIONS STANDARDSNotification Categories
StandardsNotification Header StandardMessage
StandardAcknowledgement Message StandardAccept/Reject Message
StandardNotification Delivery Cycle Standard Copyright 2005 The
Money Management Institute. All Rights Reserved. Page 13 of 68 14.
The Money Management Institute Data Standards Committee 2nd
EditionPlain English Table of Contents I.Account SetupA.New Account
ProfileB.New Account FundingC.New Account Authorization to Trade
II.Account ActivityA.ContributionsB.DistributionsC.Tax Trading
GuidelinesD.Voluntary Corporate Actions III.Account
MaintenanceA.Account TerminationB.Investment RestrictionC.Custodian
ChangeD.Financial Consultant/Team ChangesE.Halt Trading / Resume
TradingF.Investment Manager Style ChangeG.Client Profile Update
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 14 of 68 15. The Money Management Institute Data Standards
Committee 2nd Edition IV.Account NoticesA.Short Position or Debit
CashB.Proxy Information Client OverrideC.Fee Reporting Copyright
2005 The Money Management Institute. All Rights Reserved. Page 15
of 68 16. The Money Management Institute Data Standards
CommitteeNew Account Profile Notification 2nd Edition Summary:The
New Account Profile Notification is to be used by a Sponsor Firm,
Custodian, or other authorized Third Party (Sponsor) to communicate
the investors decision to retain the asset management services of
an Investment Manager (IM) for a selected investment strategy. It
provides the necessary data that the IM needs for suitability, Know
Your Client, and for management of the account. Justification:Each
Sponsor requires that their clients complete a Profile
Questionnaire before investment of their assets. Within the SMA
industry the relaying of this data is not standardized. Each
Sponsor has their own data fields that they provide to the IM. The
New Account Profile Notification will provide IMs with standardized
data for each new account, so that the information is in a
consistent format among Sponsors. The Sponsor will transmit this
data in the form of the New Account Profile notification that the
IM will use to accept the account and populate their accounting
and/or trading system for purposes of managing the account.
Definition and Scope:The New Account Profile is to be used by
Sponsors and their Financial Consultants (FCs) to relay new client
account information to the IM.The New Account Profile is only to be
used for the transmission of data for a new account. The
notification is forwarded to the selected IM for their review and
subsequent approval or rejection. The New Account Profile
Notification is to be used for individual client accounts only; it
is not a global notification. Usage Considerations: The New Account
Profile Notification is to be used by a Sponsor to notify an IM of
a decision to open a new account. This notification provides the
selected IM with: o Account Data (specific to data regarding the
clients account, e.g., IMStyle) o Client Data (populated with
personal client information, e.g., clientaddress) o Source Data (in
regards to the relationships around the account, e.g.,FC/Team
information). Copyright 2005 The Money Management Institute. All
Rights Reserved.Page 16 of 68 17. The Money Management Institute
Data Standards CommitteeNew Account Profile Notification 2nd
Edition The New Account Profile Notification data alone does not
deliver client data that could or would trigger a trading event
such as account style or restriction changes. The New Account
Profile Notification, the New Account Funding Notification, and the
New Account Authorization to Trade Notification are associated with
one another, and may be used independently or packaged together
depending on the contractual relationship between the Sponsor and
IM. The tables associated with the New Account Profile are: Account
Type Table, Restriction Type Table, and Bonding Agencies Type
Table. The New Account Profile Notification follows standard MMI
message cycles.*No service level agreement is applied by accepting
a standard message. Standards are subject to the terms and
agreements between the industry participants. Table of Contents
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 17 of 68 18. The Money Management InstituteData Standards
Committee New Account Funding Notification2nd Edition Summary:The
New Account Funding Notification is used by a Sponsor Firm,
Custodian, or other authorized Third Party (Sponsor) in order to
provide the Investment Manager (IM) with notification of funding
for a new client account. Justification:Once an account has been
established by the Sponsor, the New Account Funding Notification is
used to provide the IM notification that account is funded and
ready for investing at the discretion of the IM. Definition and
Scope:The New Account Funding Notification is sent by the Sponsor
Firm, Custodian or other authorized Third Party to the IM informing
the IM that the account is funded. The IM has the responsibility to
either accept or reject this notification. Depending on the
contractual relationship between the Sponsor and IM, the New
Account Funding Notification may be used to initiate trading on the
account. This notification is to be used on the individual account
level and is not intended as a global communication. Usage
Considerations: The New Account Funding Notification communicates
specific funding data to the IM, including: o Account information o
Cash and securities information including tax lots and
unsettledtransactions, if applicable o Custodian information, if
applicable The New Account Profile Notification, the New Account
Funding Notification, and the New Account Authorization to Trade
Notification are associated with one another, and may be used
independently or packaged together depending on the contractual
relationship between the Sponsor and IM. The New Account Funding
Notification may trigger trading. The New Account Funding
Notification does not use pre-determined table codes. The New
Account Funding Notification follows standard MMI message cycles.
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 18 of 68 19. The Money Management InstituteData Standards
Committee New Account Funding Notification2nd Edition *No service
level agreement is applied by accepting a standard message.
Standards are subject to the terms and agreements between the
industry participants. Table of Contents Copyright 2005 The Money
Management Institute. All Rights Reserved. Page 19 of 68 20. The
Money Management Institute Data Standards Committee New Account
Authorization to Trade Notification 2nd Edition Summary:The New
Account Authorization to Trade Notification is used by a Sponsor
Firm, Custodian, or other authorized Third Party (Sponsor) to
notify an Investment Manager (IM) when a new account is authorized
to begin trading. Justification:Once an account has been
established and funded by the Sponsor, the New Account
Authorization to Trade Notification is used to provide the IM with
notification that the account is ready for investing at the
discretion of the IM. Definition and Scope:The New Account
Authorization to Trade Notification is sent by the Sponsor Firm,
Custodian or other authorized Third Party to the IM informing the
IM that the account is ready for investing. This notification is to
be used on the individual account level; it is not a global
communication. Usage Considerations: The New Account Authorization
to Trade Notification communicates specific authorization data to
the IM, including: o Account information o Custodian information o
The date the IM took responsibility for discretion of the account o
The market value of the account at inception o An indication that
investment restrictions exist on the account, ifapplicable o
Special instructions, if applicable The New Account Profile
Notification, the New Account Funding Notification, and the New
Account Authorization to Trade Notification are associated with one
another, and may be used independently or packaged together
depending on the contractual relationship between the Sponsor and
IM. The New Account Authorization to Trade Notification will
trigger trading. Copyright 2005 The Money Management Institute. All
Rights Reserved.Page 20 of 68 21. The Money Management Institute
Data Standards Committee New Account Authorization to Trade
Notification 2nd Edition The New Account Authorization to Trade
Notification does not use any pre- determined table codes. The New
Account Authorization to Trade Notification follows standard MMI
message cycles.*No service level agreement is applied by accepting
a standard message. Standards are subject to the terms and
agreements between the industry participants. Copyright 2005 The
Money Management Institute. All Rights Reserved. Page 21 of 68 22.
The Money Management Institute Data Standards Committee New Account
Authorization to Trade Notification 2nd EditionTable of Contents
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 22 of 68 23. The Money Management Institute Data Standards
Committee Contribution Notification 2nd Edition Summary:The
Contribution Notification is used by a Sponsor Firm, Custodian, or
other authorized Third Party (Sponsor) to notify an Investment
Manager (IM) of a contribution to be made to an existing account.
Justification:After a clients account has been established by both
the Sponsor and the IM, clients may add additional funding to the
account from time to time. This notification enables the efficient
communication of this information from Sponsor to IM. Definition
and Scope:A Contribution Notification is defined as a Sponsor Firm,
Custodian or other authorized Third Party sending a message to
inform the IM of contribution activity in a client account. The
Contribution Notification is to be used for individual client
accounts; it is not a global notification. Contributions can be
cash, securities, or a combination of both. If the contribution is
in cash, the Contribution Notification acts as an instruction to
begin investing the additional funds. If the contribution consists
of securities, the Contribution Notification acts as a notification
of securities received into the account so that the IM can act
accordingly (e.g., liquidate, retain, etc.) Usage Considerations:
The Contribution Notification communicates specific client
contribution data to the IM, including: o Account information o
Contribution details (e.g. cash, securities, or both) o Securities
information, if applicable The Contribution Notification is not
dependent upon any other notification, nor is any other
notification dependent upon it. The Contribution Notification may
trigger trading. The Contribution Notification does not use
pre-determined table codes. The Contribution Notification follows
standard MMI message cycles.Copyright 2005 The Money Management
Institute. All Rights Reserved.Page 23 of 68 24. The Money
Management Institute Data Standards Committee Contribution
Notification 2nd Edition*No service level agreement is applied by
accepting a standard message. Standards are subject to the terms
and agreements between the industry participants. Table of Contents
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 24 of 68 25. The Money Management Institute Data Standards
CommitteeDistribution Notification 2nd Edition Summary:The
Distribution Notification is used by a Sponsor Firm, Custodian, or
other authorized Third Party (Sponsor) to notify an Investment
Manager (IM) of the need for a distribution to be made from an
existing account. Justification:After a clients account has been
established by both the Sponsor and IM, clients may withdraw cash
and/or securities from the account from time to time. This
notification enables the efficient communication of this
information from Sponsor to IM. Definition and Scope:A Distribution
Notification is defined as a Sponsor Firm, Custodian or other
authorized Third Party sending a message to inform the IM of
distribution activity in a client account. The Distribution
Notification is to be used for individual client accounts; it is
not a global notification. Distributions can be cash, securities,
or a combination of both. If the distribution is in cash, the
Distribution Notification acts as an instruction for the IM to
review the account to determine if securities must be sold so that
cash is available for the distribution. If the distribution
consists of securities, the Distribution Notification acts as a
notification of securities delivered out of the account so the IM
can act accordingly (e.g., rebalance the account). Usage
Considerations: The Distribution Notification communicates specific
client distribution data to the IM, including:o Account
informationo Distribution typeo Securities information, if
applicable The Distribution Notification is not dependent upon any
other notification, nor is any other notification dependent upon
it. The Distribution Notification may trigger trading. The
Distribution Notification does not use pre-determined table codes.
The Distribution Notification follows standard MMI message cycles.
Copyright 2005 The Money Management Institute. All Rights
Reserved.Page 25 of 68 26. The Money Management Institute Data
Standards CommitteeDistribution Notification 2nd Edition *No
service level agreement is applied by accepting a standard message.
Standards are subject to the terms and agreements between the
industry participants. Table of Contents Copyright 2005 The Money
Management Institute. All Rights Reserved. Page 26 of 68 27. The
Money Management Institute Data Standards CommitteeTax Trading
Notification 2nd Edition Summary:The Tax Trading Guidelines
Notification is used by a Sponsor Firm, Custodian, or other
authorized Third Party (Sponsor) to notify an Investment Manager
(IM) of a clients desire to realize capital gains or losses for tax
purposes. The notification may be used to prompt the IM to execute
trades or the sale of specific securities, as well as to notify the
IM of wash sale restrictions. Justification:Clients and their
financial consultants require the ability to incorporate the assets
in separately managed accounts into their tax planning strategies,
and may direct IMs to effect sales in their accounts to generate
gains or losses, according to the clients needs. These transactions
involve specific instructions concerning gain and loss targets,
types of gains or losses sought, and restriction periods to be
observed, which are otherwise not addressed by other message types.
Definition and Scope:Tax trading is defined by one of three
scenarios where the Sponsor sends notification to the IM: to
generate trades within a clients account realizing capital gains or
losses for tax purposes (Request Investment Manager Generated Tax
Trades) to generate specific sale of securities for the purpose of
realizing capital gains or losses for tax purposes (Sale of
Specific Securities) to place specific security restrictions on an
account due to tax trading by another IM (Wash Sale
Restrictions)The Tax Trading Guidelines Notification may be (a)
driven by the Sponsor, where the Sponsor gives the tax trading
directives to the IM, or (b) client driven, where the Sponsor is
merely passing along the instructions of the client for the IM to
act upon. Included in this flow is the option for the Sponsor to
notify the IM of specific security restrictions to be placed on an
account due to tax trading by another IM. This option will permit
the Sponsor to avoid having a clients tax-loss trade negated by the
actions of another manager for the same client.Unlike many of the
flows that normally occur between the Sponsor and the IM, tax
trading involves many variables that may differ significantly by
Sponsor and are dependent on the Sponsor/IM relationship.
Consequently, certain assumptions will apply between the firms and
must be agreed to in advance. Outlined below are some of the
assumptions the IM and Sponsor should discuss: Copyright 2005 The
Money Management Institute. All Rights Reserved.Page 27 of 68 28.
The Money Management Institute Data Standards CommitteeTax Trading
Notification 2nd Edition Assumptions: The IM will confirm back to
the originator of the request notification whattrades were executed
to complete the request. Once the IM has acted on the instructions,
they are considered to be complete. Requests are short-term
instructions, typically not more than one (1) week induration. This
communication is not designed to indicate long-term, ongoingtax
aware investing. Additional tax trades will require a new set of
instructions. The IM will attempt to meet the bulk of the request
but may not be able tofulfill all of it. In the event that the IM
is unable to complete the request, theIM will communicate back to
the Sponsor what portion of the request couldbe fulfilled.
Restrictions included in the Tax Trading Guidelines Notification
apply towash sales only and should be lifted after 31 days.
Depending on the IMs access to the portfolio/trading system, the IM
will beresponsible for lifting the 30-day wash sale restriction. If
the IM does nothave that access, then the Sponsor assumes the
responsibility. The IM is responsible for reinvesting the account
after the expiration of the30-day wash sale restriction. However,
the IM, at its discretion, may restrictthe accounts from further
trading beyond the 30-day period, up to andincluding year-end, to
avoid offsetting the results of the tax trades.The Tax Trading
Guidelines Notification is to be used for individual client
accounts; it is not a global notification. Usage Considerations:
The Sponsor Firm, Custodian or other authorized Third Party will
indicate to the IM the type of tax trading to be done, the amount
of gains or losses to be realized, the minimum gain or loss to be
realized per transaction, and how to treat the proceeds (if any).
The Sponsor Firm, Custodian or other authorized Third Party may
give parameters such that the specific securities to be bought/sold
are at the IMs discretion, or the Sponsor Firm, Custodian or other
authorized Third Party may dictate specific securities, lots and
amounts to be executed by the IM for tax trading purposes. The Tax
Trading Guidelines Notification communicates necessary data
elements, including: o Client account information o Details of tax
trade (e.g. type, amount, instructions) o Specific security
information for each tax lot (e.g. security identifiers, taxlot
information, unit cost) Copyright 2005 The Money Management
Institute. All Rights Reserved. Page 28 of 68 29. The Money
Management Institute Data Standards CommitteeTax Trading
Notification 2nd Edition o Security restriction information for
each tax lot (e.g. security identifiers, wash sale expiration
information) o Reject reason codes, if applicable (in the case of
sponsor executed tax trades, a reject reason code must be included
for each tax lot) o Specific security sale information for each tax
lot The Tax Trading Guidelines Notification is not dependent upon
any other notification, nor is any other notification dependent
upon it. The Tax Trading Guidelines Notification may trigger
trading. The Tax Trading Guidelines Notification uses the following
pre-determined table codes: Tax Trade Type. The Tax Trading
Guidelines Notification follows standard MMI message cycles.*No
service level agreement is applied by accepting a standard message.
Standards are subject to the terms and agreements between the
industry participants. Copyright 2005 The Money Management
Institute. All Rights Reserved.Page 29 of 68 30. The Money
Management Institute Data Standards CommitteeTax Trading
Notification 2nd EditionTable of Contents Copyright 2005 The Money
Management Institute. All Rights Reserved. Page 30 of 68 31. The
Money Management InstituteData Standards Committee Voluntary
Corporate Action Notification2nd Edition Summary:The Voluntary
Corporate Actions Notification is used to relay voluntary corporate
action details, requests for action, and decision information
between the Sponsor Firm, Custodian, or other authorized Third
Party (Sponsor) and the Investment Manager (IM) in accordance with
the arrangement between all parties. Justification:Once a
separately managed account has been invested by the IM, the
security holdings within that account may undergo voluntary
reorganizations. The Voluntary Corporate Action Notification was
created to relay the details and solicit the IMs decision
concerning securities undergoing voluntary corporate
reorganizations on behalf of clients who hold such securities.
Definition and Scope:The Voluntary Corporate Action Notification
begins by either (a) the Sponsor or the Custodian notifying the IM,
or (b) the IM notifying the Sponsor or Custodian of a Voluntary
Corporate Action (VCA). The corresponding party acknowledges
receipt of the VCA Notification back to the originating party. The
IM then communicates the VCA decision details made on behalf of the
accounts that the IM manages, using the Voluntary Corporate Action
Decision Notification.The VCA choices can be any or all of the
following: stock tender only, stock and cash tender, cash tender
only, odd-lot offer to purchase or sell or participation in
optional dividend or other. The Voluntary Corporate Action
Notification can apply to one or multiple accounts. In addition, a
Voluntary Corporate Action Notification could affect one or
multiple securities. Separate instruction files should be sent for
each VCA that the IM decides to participate in. Usage
Considerations: When a relationship between Sponsor, Custodian and
IM is initially established, it is determined at that time (a)
which party is responsible for the notification of voluntary
reorganizations, (b) whether the IM should send VCA decisions to
the Sponsor or to the Custodian, and (c) the standard timeframe for
submission (i.e. in relation to the VCA record date). Copyright
2005 The Money Management Institute. All Rights Reserved.Page 31 of
68 32. The Money Management InstituteData Standards Committee
Voluntary Corporate Action Notification2nd Edition The Voluntary
Corporate Action Notification can follow one of three different
message cycles:o Message Cycle Type 1: Initial notification comes
from Sponsor: Sponsor notifies the IM of VCA The IM acknowledges
receipt to Sponsor The IM notifies the Sponsor of the decision by
sending a Voluntary Corporate Action Decision Notification Sponsor
processes the file and sends accept/reject notification message
back to the IM, providing reasons for a reject (if applicable) in
the comment field IM acknowledges receipt of processed file or
accept/reject notification file back to the Sponsoro Message Cycle
Type 2: Initial notification comes from Custodian: Custodian
notifies the IM of VCA The IM acknowledges receipt to Custodian The
IM notifies the Custodian of the Voluntary Corporate Action
Decision (or, if previously established, notifies Sponsor of
decision) by sending a Voluntary Corporate Action Decision
Notification Custodian processes the file and sends accept/reject
notification message back to the IM, providing reasons for a reject
(if applicable) in the comment field. IM acknowledges receipt of
processed file or accept/reject notification file back to the
Custodiano Message Cycle Type 3: Initial notification comes from
IM: The IM notifies the Sponsor or Custodian of VCA by sending a
Voluntary Corporate Action Notification, and of the action decision
by sending a Voluntary Corporate Action Decision Notification
Sponsor or Custodian acknowledges receipt to IM Sponsor or
Custodian processes the file and sends an accept/reject
notification message back to the IM, providing reasons for a reject
(if applicable) in the comment field IM acknowledges receipt of
processed file or accept/reject notification file back to the
Custodian The Voluntary Corporate Action Notification from the
Sponsor or Custodian (Message Cycle Type 1 or 2) communicates
specific data to the IM, including;o Terms and details of the VCA
(e.g. type, dates)o Account information for those security owners
impacted by the VCA Copyright 2005 The Money Management Institute.
All Rights Reserved. Page 32 of 68 33. The Money Management
InstituteData Standards Committee Voluntary Corporate Action
Notification2nd Edition o Security details o Summary information
(e.g. number of shares and accounts included) The Voluntary
Corporate Action Notification from the IM to the Sponsor or
Custodian (Message Cycle Type 3, or decision on Message Cycle Type
1 or 2) communicates specific data to the IM, including;o Terms and
details of the VCA (e.g. type, dates)o Account information for
those security owners impacted by the VCAo Security detailso
Summary information (e.g. number of shares and accounts included)o
VCA action taken (multiple codes if applicable)o Summary
information (e.g. number of shares and accounts included) The
Voluntary Corporate Action Notification is associated with three
pre- determined tables: Rejection Table, Voluntary Corporate Action
Table, and Voluntary Corporate Action Type Table. The Voluntary
Corporate Action Notification does not follow standard MMI message
cycles.*No service level agreement is applied by accepting a
standard message. Standards are subject to the terms and agreements
between the industry participants. Copyright 2005 The Money
Management Institute. All Rights Reserved. Page 33 of 68 34. The
Money Management InstituteData Standards Committee Voluntary
Corporate Action Notification2nd Edition Table of Contents
Copyright 2005 The Money Management Institute. All Rights Reserved.
Page 34 of 68 35. The Money Management InstituteData Standards
CommitteeAccount Termination Notification2nd EditionSummary:The
Account Termination Notification is to be used by a Sponsor Firm,
Custodian, or other authorized Third Party (Sponsor) to communicate
the decision to terminate the asset management services of an
Investment Manager (IM) for an account. Justification:In a world of
volatile investments, it is critical that an investors wishes and
instructions be acted upon as quickly as possible. The Account
Termination Notification will facilitate the timely notification of
a Sponsor or investors desire to terminate the asset management of
an account by a designated IM. In addition to notifying the IM of
the account termination, this notification will also inform the IM
of the investors chosen disposition method/termination instructions
for the account. Investment Managers are expected to react to
Account Termination Notifications immediately upon receipt.
Definition and Scope:An account termination is defined as when the
Sponsor Firm, Custodian or other authorized Third Party, on behalf
of an investor, notifies an IM that the services provided by the IM
are no longer required for a specific account.Account Termination
Notifications are designated for a single specific account; it is
not a global communication. Therefore, if an investor, via a
Sponsor, has multiple accounts managed by the IM, and wishes to
terminate more than one account, a separate Account Termination
Notification is be required for each termination.The Account
Termination Notification must also include the investors desired
disposition method/termination instructions (e.g. terminate and
keep, full or partial liquidation by the Sponsor or IM). Usage
Considerations: Upon the decision to terminate an account with the
IM, the Sponsor will send to the IM an Account Termination
Notification containing the necessary information, including: o
Account details o Termination instructionsCopyright 2005 The Money
Management Institute. All Rights Reserved.Page 35 of 68 36. The
Money Management InstituteData Standards CommitteeAccount
Termination Notification2nd Edition o Security information, if
applicable Upon accepting the termination, the IM should notify the
Sponsor of pending trades in the account. At that point, the
terminated account should have no further transactions other than
those included in the termination communication and/or settlement
of any pending transactions. The Account Termination Notification
is not dependent upon any other notifications, nor is any other
dependent upon it. The Account Termination Notification may trigger
a trading event if the termination instruction indicates either
full or partial liquidation by the IM. The Account Termination
Notification uses the following pre-determined table codes:
Termination Instruction Table, Termination Reason Table. The
Account Termination Notification follows standard MMI message
cycles.*No service level agreement is applied by accepting a
standard message. Standards are subject to the terms and agreements
between the industry participants. Table of Contents Copyright 2005
The Money Management Institute. All Rights Reserved.Page 36 of 68
37. The Money Management InstituteData Standards Committee
Investment Restriction Notification2nd Edition Summary:The
Restriction Change Notification is to be used by a Sponsor Firm,
Custodian, or other authorized Third Party (Sponsor) to communicate
restrictions on actively managed accounts and to relay relevant
instructions to the Investment Manager (IM) regarding the impact of
those restrictions if necessary. Justification:After the Sponsor
has established a clients account at the IM, a client may choose to
add investment restrictions, change existing investment
restrictions or remove existing investment restrictions. These
changes may require further action to be taken in the client
account, e.g. sell an existing position. The Restriction
Notification has been created for the Sponsor to communicate the
clients investment restriction instructions, as well instructions
governing the handling of securities affected by those
restrictions. Definition and Scope:The Restriction Notification is
used by Sponsor, Custodian or other authorized Third Party on
behalf of an investor to notify IMs of restrictions in accounts
under their management. The Restriction Notification may also
include specific instructions for the treatment of securities held
that are affected by the requested restriction changes.The
Restriction Notification is to be used for individual client
accounts only; it is not a global notification. Usage
Considerations: The Restriction Notification from the Sponsor Firm,
Custodian or other authorized Third Party to the IM delivers
account specific data elements relating to the requested
restriction change, including: o Account details o Financial
Consultant/Team information o Custodian information o Designation
of whether the Restriction Notification is an addition, change or
deletion to previous restrictions on the account o Restriction type
(e.g. category, cash limit, duration, individual security, etc.) o
Restriction description (specific category, security, etc. to be
restricted)Copyright 2005 The Money Management Institute. All
Rights Reserved.Page 37 of 68 38. The Money Management
InstituteData Standards Committee Investment Restriction
Notification2nd Edition In addition, the notification may include
additional specific data elements if the restriction change
requires action to be taken on a security held in the account at
the time of the change, for example: o Restriction Sub-Types (e.g.
buy, sell, buy/sell, gain/loss) o Restriction Qualifiers (e.g.
min/max, weighting limit) o Restrictions or securities in
violation, with instructions for handling thosesecurities (e.g. the
IM to liquidate or the Sponsor to liquidate/remove) The Restriction
Notification can trigger trading. The Restriction Notification is
not dependent upon any other notification, nor is any other
notification dependent upon it. The Restriction Notification is
associated with three pre-determined tables: Reject Table,
Restriction Table, and Bonding Agencies. The Restriction
Notification follows standard MMI message cycles.*No service level
agreement is applied by accepting a standard message. Standards are
subject to the terms and agreements between the industry
participants. Table of Contents Copyright 2005 The Money Management
Institute. All Rights Reserved.Page 38 of 68 39. The Money
Management Institute Data Standards Committee Custodian Change
Notification 2nd Edition Summary:The Custodian Change Notification
is used by a Sponsor Firm, Custodian, or other authorized Third
Party (Sponsor) to relay a change in Custodian for a client account
to the Investment Manager (IM). It is also used to relay
instructions to halt trading in the account during a change in
custody. Justification:When a change in Custodian occurs, the
Sponsor or authorized Third Party must notify the IM so that the IM
can update its records, and halt trading during the transfer of
assets from one Custodian to another. The halt in trading allows
the new Custodian to reconcile the account, and the Sponsor and IM
to acknowledge the transfer of assets without error. Definition and
Scope:A Custodian change is defined as when the Sponsor and the IM
are remaining constant while the custodian of the assets is
changing. For separately managed accounts, the clients assets are
held in custody and executed through the same entity (in most
cases, the custodial/trading entity is the Sponsor). However, in
some circumstances the client may be housing the custodial aspect
of their account at a bank, trust company or some other institution
separately from where the trades would be placed. The Sponsor in
this scenario may be completely independent from the Custodian
and/or broker-dealer.The client, old Custodian, or new Custodian
will alert the Sponsor of a change in custody. The Sponsor or
authorized Third Party will initiate notifications to the IM in
this process. During a change in Custodian, as the assets are being
transferred from one entity to another, all trading is normally
halted (generally for ten business days or less). Once the new
custodian notifies the Sponsor that the accounts assets have been
successfully transferred, the Sponsor will send a separate Resume
Trading Notification to the IM to resume trading.The Custodian
Change Notification is used for individual client accounts only; it
is not a global notification. Usage Considerations: The Custodian
Change Notification delivers the data necessary for the IM to act
on the change, including: o Account specific information Copyright
2005 The Money Management Institute. All Rights Reserved. Page 39
of 68 40. The Money Management Institute Data Standards Committee
Custodian Change Notification 2nd Edition o Old and new Custodian
information (e.g. Custodian designation and identifiers, account
numbers, Custodian contact information) o Halt trading details
(e.g. dates) o Indication of whether or not the Custodian needs an
ad hoc letter to identify responsibility for trade settlement
between Custodian and IM or Sponsor o Indication of whether or not
the Custodian needs trade authorization signature(s) for person(s)
authorized to give Custodian instructions on behalf of the account
The Custodian Change Notification delivers client data that may
impact trading. The Custodian Change Notification is not dependent
upon any other notification, nor is any other notification
dependent upon it. The Custodian Change Notification uses the
following pre-determined table code: Rejection Table. The Custodian
Change Notification follows standard MMI message cycles.*No service
level agreement is applied by accepting a standard message.
Standards are subject to the terms and agreements between the
industry participants. Table of ContentsCopyright 2005 The Money
Management Institute. All Rights Reserved.Page 40 of 68 41. The
Money Management InstituteData Standards Committee Financial
Consultant/Team Change Notification2nd Edition Summary:The
Financial Consultant/Team Change Notification is to be used by the
Sponsor Firm, Custodian, or other authorized Third Party (Sponsor)
and their Financial Consultants to relay updated Financial
Consultant/Team changes to Investment Managers (IM).
Justification:Financial Consultants (FCs) change teams, branches,
and/or firms regularly. Many IMs maintain internal records of
FCs/Teams and their associated accounts. To maintain the
appropriate relationship to client accounts, it is necessary for
the Sponsor or FC to communicate these changes to the IM.
Historically, this information has been communicated via fax,
e-mail, phone, or not at all. Definition and Scope:An FC/Team
change is defined as any of the following:a) An FC/Team moves from
one office to another, within the same Sponsor Firm b) An FC/Team
leaves the Sponsor Firm, and the accounts are assigned to
adifferent FC/Team c) An FC partners with a Team of ConsultantsThe
Financial Consultant/Team Change Notification can be used to relay
changes for one account or multiple accounts (can be a global
notification). Usage Considerations: The Financial Consultant/Team
Change Notification contains data necessary for the IM to apply the
change, including: o Account details o Old FC/Team information o
New FC/Team information o Indication of whether or not the change
is to be applied to all accountslinked to the old FC/Team The
Financial Consultant/Team Change Notification is to be used by the
Sponsor or the FC to update FC/Team information for client accounts
to the IM. Copyright 2005 The Money Management Institute. All
Rights Reserved.Page 41 of 68 42. The Money Management
InstituteData Standards Committee Financial Consultant/Team Change
Notification2nd Edition The Financial Consultant/Team Change
Notification is not dependent upon any other notification, nor is
any other notification dependent upon it. The Financial
Consultant/Team Change Notification does not trigger trading. The
Financial Consultant/Team Change Notification is not associated
with any pre-determined tables. The Financial Consultant/Team
Change Notification follows MMI standard message cycles.*No service
level agreement is applied by accepting a standard message.
Standards are subject to the terms and agreements between the
industry participants. Table of Contents Copyright 2005 The Money
Management Institute. All Rights Reserved. Page 42 of 68 43. The
Money Management InstituteData Standards CommitteeHalt Trading /
Resume Trading Notification2nd Edition Summary:The Halt Trading /
Resume Trading Notification is to be used by the Sponsor Firm,
Custodian, or other authorized Third Party (Sponsor) to notify the
Investment Manager (IM) to halt or resume trading for an account.
Justification:During the course of business for an account, the
Sponsor may find it necessary to halt trading on an account for a
period of time or to initiate the resumption of trading previously
halted. In order to expedite these requests the Sponsor will send a
standard communication to the IM with instructions. Definition and
Scope:The process for a Halt Trading Notification is defined when
the Sponsor notifies the IM to stop all investment activity for an
account. During the halt trading period no buying or selling may be
done in the account; only Corporate Actions may be processed during
the halt trading period.Sponsors may elect to put a Halt Trading
request on an account for a variety of reasons such as: change of
account information (e.g. style change), change of custodian, at
the request of the client, issues regarding the assets in the
account, or issues regarding the restrictions in the account.In
order to reinitiate the investment activity, the Sponsor will send
a Resume Trading Notification to the IM, notifying the IM to resume
all investment activity for an account. Usage Considerations: The
Halt/Resume Trading Notifications contain specific data necessary
for the IM to interpret the instructions, including: o Account
information o Financial Consultant/Team contact information o
Custodian information o Halt or resume trading effective date o
Estimated length of inactivity Both the Halt/Resume Trading
Notifications may be sent in conjunction with other notifications
(e.g. Custodian Change). Copyright 2005 Money Management Institute.
All Rights Reserved Page 43 of 68 Page 43 of 68 44. The Money
Management InstituteData Standards CommitteeHalt Trading / Resume
Trading Notification2nd Edition The Halt/Resume Trading
Notification is not dependent upon any other notification, nor is
any other notification dependent upon it. The Halt/Resume Trading
Notification may trigger trading. The Halt/Resume Trading
Notification utilizes the Reason Type and Rejection Type table
codes. The Halt/Resume Trading Notification follows standard MMI
message cycles.*No service level agreement is applied by accepting
a standard message. Standards are subject to the terms and
agreements between the industry participants. Table of
ContentsCopyright 2005 Money Management Institute. All Rights
ReservedPage 44 of 68Page 44 of 68 45. The Money Management
Institute Data Standards CommitteeInvestment Manager Style Change
Notification2nd Edition Summary:The Investment Manager Style Change
Notification is to be used by a Sponsor Firm, Custodian, or other
authorized Third Party (Sponsor) in the event that a client selects
a different investment strategy for their existing account while
the Investment Manager (IM) remains unchanged. Justification:The
clients initial investment strategy may change with an IM after the
original establishment/acceptance of a clients account by the
Sponsor and the IM. Since most of the data within the client
profile will not change, rather than re-send the entire Client
Profile Update, certain data points may be sent via the Investment
Manager Style Change Notification. Definition and Scope:The
Investment Manager Style Change Notification is to be used by
Sponsors and their Financial Consultants when a client selects a
different investment strategy with the same IM, and the client
account number remains the same. This notification is forwarded to
the selected IM for their review and subsequent approval or
rejection. This notification could trigger trading in a clients
separately managed account. This notification is only to be used
for an individual client account; it is not a global notification.
Usage Considerations:The Investment Manager Style Change
Notification delivers certain client specific datarequired by the
IM to act on a change in the clients investment strategy,
including:o Account detailso Change in investment styleo Change in
the tax strategy or client restrictions, if appropriateThe
Investment Manager Style Change Notification is not dependent upon
any othernotification, nor is any other notification dependent upon
it.The Investment Manager Style Change Notification in most cases
will trigger some typeof trading activity.The Investment Manager
Style Change Notification uses the following pre-determinedtable
codes: Termination Instructions, Restriction Type, Bonding Agency
Code. Copyright 2005 Money Management Institute. All Rights
Reserved Page 45 of 68 Page 45 of 68 46. The Money Management
Institute Data Standards CommitteeInvestment Manager Style Change
Notification2nd Edition The Investment Manager Style Change
Notification follows standard MMI messagecycles. *No service level
agreement is applied by accepting a standard message. Standards are
subject to the terms and agreements between the industry
participants. Table of Contents Copyright 2005 Money Management
Institute. All Rights ReservedPage 46 of 68Page 46 of 68 47. The
Money Management InstituteData Standards CommitteeClient Profile
Update Notification 2nd Edition Summary:The Client Profile Update
is to be used by a Sponsor Firm, Custodian, or other authorized
Third Party (Sponsor) and their Financial Consultants to relay
updated client account information to the Investment Manager
(IM).Justification:After a clients account has been established at
the IM by the Sponsor, certain information may change on the
account such as a clients address, marital status or other
information that would not trigger trading when updated. Rather
than resend the complete New Account Profile data as used when
establishing a new account, a condensed version was created: Client
Profile Update.Definition and Scope:The Client Profile Update is to
be used by Sponsors and their Financial Consultants to relay
updated client account information to the IM. The notification is
forwarded to the selected IM for their review and subsequent
approval or rejection. The Client Profile Update will not trigger
trading in a clients separately managed account. This notification
is to be used for individual client accounts only; it is not a
global notification.A variety of reasons could result in the need
for the Client Profile Update to be sent to the IM: only those
fields that need to be updated are to be sent to the IM. There are
no conditional data fields associated with the Client Profile
Update.Usage Considerations: The Client Profile Update delivers
client specific data:o Change in Source Datao Change in Account
Datao Change in Client Data The Client Profile Update does not
deliver client data that could or would trigger a trading event
such as account style or restriction changes. The Client Profile
Update is not dependent upon any other notification, nor is any
other notifications dependent upon it. The Client Profile Update
does not use pre-determined table codes. The Client Profile Update
follows the standard MMI message cycle. Copyright 2005 Money
Management Institute. All Rights Reserved Page 47 of 68 Page 47 of
68 48. The Money Management InstituteData Standards CommitteeClient
Profile Update Notification 2nd Edition *No service level agreement
is applied by accepting a standard message. Standards are subject
to the terms and agreements between the industry participants.
Table of Contents Copyright 2005 Money Management Institute. All
Rights ReservedPage 48 of 68Page 48 of 68 49. The Money Management
Institute Data Standards CommitteeShort Position or Debit Cash
Notification 2nd Edition Summary:The Short Position or Debit Cash
Notification is utilized by the Sponsor Firm, Custodian, or other
authorized Third Party (Sponsor) to notify the Investment Manager
(IM) of a debit or short position in a client account so that
corrective action may be taken. Justification:Currently the Sponsor
e-mails, faxes or calls regarding the debit balance or short
position that has been identified in the client account. In order
to provide a standardized process, the Sponsor should notify IM of
a short or debit in a clients account. The IM may respond with
corrective action to be taken to resolve short position or debit.
It is anticipated that this notification would efficiently augment
reconciliation procedures performed by the IM designed to detect
these situations.Definition and Scope:The Short Position or Debit
Cash Notification would be sent at the client level from the
Sponsor Firm to the IM.Debit balances that occur in a client
account can be caused by the following reasons (not related to
system problems): Account over-invested Distribution processed
without notification to IM Fee charged to client account Tax
withheld (missing W8/W9) Distribution processed/Sales not
executed/processed Account number changes/bulk FC transfers Margin
account DVP/DK accountsShort positions that occur in a client
account can be caused by the following reasons: Position oversold
Reorgs on a sold position due bill has not hit the account Pending
stock dividend Wrong position sold Position sold while journaling
out, ACAT Client-directed securities are delivered out of the
account without notifying theSponsor (ACAT/Gift) DK/DVP
tradesCopyright 2005 Money Management Institute. All Rights
Reserved Page 49 of 68 Page 49 of 68 50. The Money Management
Institute Data Standards CommitteeShort Position or Debit Cash
Notification 2nd Edition Usage Considerations: The Short Position
or Debit Cash Notification delivers specific data that is necessary
for the IM to research the debit or short, including:o Account
informationo Custodian informationo Date and amount of debit or
shorto Short position security information and number of shares or
unitso Reason code The Short Position or Debit Cash Notification
may deliver client data that could or would trigger a trading
event. The Short Position or Debit Cash Notification is not
dependent upon any other notification, nor is any other
notification dependent upon it. The Short Position or Debit Cash
Notification does not use pre-determined table codes. The Short
Position or Debit Cash Notification follows standard MMI message
cycles.*No service level agreement is applied by accepting a
standard message. Standards are subject to the terms and agreements
between the industry participants. Copyright 2005 Money Management
Institute. All Rights ReservedPage 50 of 68Page 50 of 68 51. The
Money Management Institute Data Standards CommitteeShort Position
or Debit Cash Notification 2nd Edition Table of Contents Copyright
2005 Money Management Institute. All Rights Reserved Page 51 of 68
Page 51 of 68 52. The Money Management InstituteData Standards
CommitteeProxy Information Client Override Notification 2nd Edition
Summary:The Proxy Information Client Override Notification is sent
by the Sponsor Firm, Custodian, or other authorized Third Party
(Sponsor) to notify an Investment Manager (IM) that a client has
stipulated how a proxy for specific security is to be voted. This
notification will only occur if the IM is assigned to vote proxies
and a client wishes to override the voting decision of the IM.
Justification:The IM normally votes proxies according to their own
guidelines. However, there are times when a client may stipulate
how a specific security should be voted (typically larger accounts,
Taft Hartley accounts, etc.). Therefore, standardized communication
from the Sponsor to the IM is required when a specific account
requires a security or group of securities to be voted in a certain
way. Definition and Scope:Proxy voting is required for all equity
securities owned in a portfolio. At the inception of an account,
the client is typically given the option to vote the proxies
themselves, assign the responsibility to the IM, or assign the
responsibility to the Sponsor. For those instances where a client
wishes to override the voting authority of the IM, a proxy vote
instruction should be included for each applicable proxy proposal
number. The IM, upon accepting the notification, will assume
responsibility of voting the proposal(s) according to the clients
instruction. Usage Considerations: The Proxy Information Client
Override Notification communicates to the IM the clients
instruction for how the proxy for a specific security or securities
should be voted. The notification includes data necessary for the
IM to vote, including: o Account information o Security
identification details o Total number of shares owned by the
account o Proxy proposal number and specific vote instruction (e.g.
For, Against, or Abstain) The Proxy Information Client Override
Notification is not dependent upon any other notification, nor is
any other notification dependent upon it.Copyright 2005 Money
Management Institute. All Rights ReservedPage 52 of 68Page 52 of 68
53. The Money Management InstituteData Standards CommitteeProxy
Information Client Override Notification 2nd Edition The Proxy
Information Client Override Notification does not trigger trading.
The Proxy Information Client Override Notification does not use
pre-determined table codes. The Proxy Information Client Override
Notification follows standard MMI message cycles.*No service level
agreement is applied by accepting a standard message. Standards are
subject to the terms and agreements between the industry
participants. Table of Contents Copyright 2005 Money Management
Institute. All Rights ReservedPage 53 of 68Page 53 of 68 54. The
Money Management InstituteData Standards Committee Fee Reporting
Notification2nd Edition Summary:By utilizing the Detailed and
Summary Fee Notification, the Sponsor Firm, Custodian, or other
authorized Third Party (Sponsor) is relaying period specific
billing information pertaining directly to the Investment Managers
(IM) distributed accounts from the Sponsor. Justification:A
reporting standard for the Detailed and Summary Fee Notification
(Fee Notification) from Sponsor and/or Custodians should be
provided in a summary or detailed format to those IM that are
contracted fiduciary advisers or sub-advisers in SMA asset
management programs. Fee information is necessary for portfolio
accounting as well as revenue reporting and projection, sales
compensation, performance, auditing and due diligence. While the
fee information is commonly available at the account level by
style, a summarized representation from Sponsor to IM is required.
Sponsors can send the detailed, summary, or both fee notifications.
This notification can be utilized by the IM to validate their fees
and process any reconciliation needed. Definition and Scope:The Fee
Notification is sent from the Sponsor to the IM. The Sponsor
consolidates all of its fees associated with the clients account,
inclusive of the Financial Consultants and IM fees, specifically
relating to the end-client and IM contracts. Sponsors use several
parameters such as the number of billing days to calculate the
total fees that are debited from the clients account or the fees
paid directly to the IM.The process should be a common format of
information fed to IMs on a periodic basis (with frequency
depending upon the relationship with the Sponsor). The information
and underlying fee parameters should be provided to the IMs in
order to provide the ability to upload fee information to any given
portfolio accounting system without any necessary translation to
their preferred system. The fee detail reports do not necessarily
need to equal the summary report. Adjustments at the summary level
may not match the detailed level due to circumstances such as
trading errors. Also, not all adjustments are account specific.
Usage Considerations: This notification delivers specific data that
is unique to its function. Below represents some of the data fields
that are specific to this notification. Copyright 2005 Money
Management Institute. All Rights ReservedPage 54 of 68 55. The
Money Management InstituteData Standards Committee Fee Reporting
Notification2nd Edition o Detailed: Account Billing Method Total
Market Value and Date Reporting Period Fee Type Adjustments Book
Date Total Fees (Account and Manager) Annual Effective Rateo
Summary: The information below repeats for each investment style
Investment Manager Style Reporting Period Fee Type Billing Method
Date of Assets Valued Adjustments (including Aggregate) Total
Number of Accounts Billed Total Assets Billed Payment Total
(including Manager Fee) The Fee Notification could trigger a
trading event (for example the need for the IM to raise additional
funds to cover the fees or adjust the portfolio to cover the debit
of the fee). The Fee Notification is not dependent upon any other
notification, nor is any other notification dependent upon it. The
Fee Notification is associated with the two pre-determined tables:
Fee Type and Adjustment Type. The Fee Notification follows standard
MMI message cycles. The Detailed and Summary Fee Notifications are
for informational purposes only.*No service level agreement is
applied by accepting a standard message. Standards are subject to
the terms and agreements between the industry participants.Table of
ContentsCopyright 2005 Money Management Institute. All Rights
Reserved Page 55 of 68 56. The Money Management InstituteData
Standards Committee Fee Reporting Notification2nd Edition Copyright
2005 Money Management Institute. All Rights Reserved Page 56 of 68
57. The Money Management InstituteData Standards Committee Message
Flows2nd EditionTypical Message Notification FlowInitial
NotificationSponsor IM SMA OperationsSponsorAcknowledgement of
Receipt IM SMA OperationsSponsor Accept or Reject of Notification
IM SMA Operations Copyright 2005 Money Management Institute. All
Rights Reserved Page 57 of 68 58. The Money Management
InstituteData Standards Committee Message Flows2nd EditionVoluntary
Corporate ActionMessage Notification Flows Message Cycle Types 1
and 2 Initial NotificationSponsor or CustodianIM SMA
OperationsSponsor or Custodian Acknowledgement of Receipt IM SMA
OperationsSponsor or CustodianNotification of VCA DecisionIM SMA
OperationsSponsor or Custodian Accept/Reject of Decision
Notification IM SMA OperationsSponsor or CustodianIM SMA
OperationsAcknowledgement of Processed file or Accept/Reject of
Notification file Copyright 2005 Money Management Institute. All
Rights Reserved Page 58 of 68 59. The Money Management
InstituteData Standards Committee Message Flows2nd EditionVoluntary
Corporate Action Message Notification FlowsMessage Cycle Type
3Sponsor or CustodianInitial NotificationIM SMA OperationsSponsor
or CustodianAcknowledgement of ReceiptIM SMA OperationsSponsor or
CustodianIM SMA Operations Accept/Reject of Decision
NotificationSponsor or Custodian Acknowledgement of Processed file
or IM SMA Operations Accept/Reject of Notification file Table of
Contents Copyright 2005 Money Management Institute. All Rights
Reserved Page 59 of 68 60. The Money Management InstituteData
Standards Committee Glossary for Plain English2nd EditionGlossary
for Plain English Document Ad Hoc Letter Sometimes called Omgeo
letters. An agreement between an Investment Manager (IM) and the
Custodian to accept trades via DTC/Omgeo once they are affirmed by
the IM. Cash Tender An offer where the company offers to buy back
shares at a particular price per share for cash. Custodian Firm
designated by the Sponsor/Client to have legal custody of clients
assets (stocks, bonds, etc.), settle all transactions, and update
client records with respect to changes in stock or bonds, cash
flows, corporate reorganizations. DVP TradesStands for Delivery
Versus Payment trades. Delivery- Versus-Payment is a securities
industry procedure whereby delivery of securities sold is made to
the buying customers Broker Dealer or Custodian in exchange for
payment, usually in the form of cash. Also called cash on delivery,
delivery against payment, delivery against cash, or, from the sell
side, receive versus payment. DKStands for Dont Know. Utilized with
DVP transactions when one side does not recognize one or more
aspects of the trade being settled. Financial Adviser (FA)The
person responsible for the primary distribution of the SMA product
to retail/institutional clients. The first point of contact for
investors. In most cases FAs are registered broker dealer agents
that are either in- house (on the payroll) at the Sponsor or are
contracted as independent representatives. Financial Consultant
(FC) See Financial Adviser Institutional SMA Type of SMA sold by
IMs or the Sponsors that focuses primarily on institutions (e.g.
corporations, pension plans, etc.) with account minimums of $1
million and greater. Often these accounts are managed by Investment
Managers who may be responsible for managing similar mutual funds
or hedge funds. Investment Company Institute (ICI)The national
trade association of the American investment company industry.
Copyright 2005 Money Management Institute. All Rights Reserved Page
60 of 68 61. The Money Management InstituteData Standards Committee
Glossary for Plain English2nd Edition The Institute represents its
members and their shareholders in matters of legislation,
regulation, taxation, public information, economic and policy
research, business operations, and statistics. Investment Manager
(IM) An Investment Manager (IM) is a registered investment adviser
under the Investment Advisers Act of 1940 and has the power,
delegated to it in writing, to manage, acquire and dispose of
assets held in a clients account. In the Separately Managed Account
(SMA) industry, the IM is the provider or manufacturer of the
investment process for the client. They generally create model
portfolios based on a particular investment style and risk
tolerance. IMs may act as sub advisers, as part of a master
agreement with the Sponsor, servicing as co-fiduciary on the client
account. Know Your Customer (Client) An ethical concept in the
securities industry that an Program/Suitability adviser who
recommends the purchase or sale of any security to a customer has
taken the customers financial situation into consideration and
believes the recommendation is suitable for that customer.
Customers opening accounts at brokerage firms must supply financial
information that satisfies the know your customer requirement for
routine purposes. Managed Account (MA)A professionally managed
portfolio of individual securities offered by Broker Dealers,
Investment Managers, Banks, Insurance Companies, etc. with
discretion given to an authorized Investment Manager. Money
Management Institute (MMI)The national trade organization for the
Managed Accountsindustry, representing Investment Management firms
and Sponsors of investment consulting programs. The MMI was created
in 1997 to serve as a forum for the managed account industry's
leaders to address common concerns, discuss industry issues, and
work together to better serve investors. The Institute is the
leading advocate for the industry on regulatory and legislative
issues. http://www.moneyinstitute.com Copyright 2005 Money
Management Institute. All Rights ReservedPage 61 of 68 62. The
Money Management InstituteData Standards Committee Glossary for
Plain English2nd Edition Multiple Discipline Products (MDP)Type of
account that employs multiple investment- styles within one account
enabling ease of asset allocation and diversification. Multiple
Strategy/Manager An alternative name for Multiple Discipline
Products Portfolios (MSP)(MDP). Mutual Fund WrapType of advisory
account where mutual funds are the sole investment vehicle. These
vehicles often include asset allocation advice along with
rebalancing capabilities. Odd-lot Offer An offer by an issuing
company to repurchase shares of their stock for holders of
quantities of less then 100 shares. Offer can be structured to
include an option to attain shares bringing the holder up to 100
shares. On-line Managed Account Investors can build their own
target portfolio that includes stocks, mutual funds and bonds.
Usually little or no advice is provided and fees for brokerage and
custody are bundled into the account charge. Separately Managed
Account (SMA)An individual investment account offered by Financial
Consultants who provide advisory services and/or are managed by
independent money managers using an asset-based fee structure.These
accounts are comprised of securities (including stocks, bonds,
mutual funds, commodities, etc.) which represent a particular
target investment style, which is selected based on a particular
investors profile or financial goals. Sponsor A firm that
establishes, organizes, maintains and markets separately managed
account programs. These firms are generally large broker/dealers,
banks or third party asset management firms. They perform among
other duties, ongoing due diligence to determine the Investment
Managers participation level in their program. Stock & Cash
Tender A corporate action where the company offers to buy back
shares in exchange for a proportional amount of another stock and a
cash value per share. Stock TenderA corporate action where the
company offers to buy back shares in exchange for a proportional
amount of another stock. Copyright 2005 Money Management Institute.
All Rights Reserved Page 62 of 68 63. The Money Management
InstituteData Standards Committee Glossary for Plain English2nd
Edition Taft-Hartley ActThe Taft-Hartley Act, officially known as
the Labor- Management Relations Act, is a Federal law that was
enacted in 1947 that prohibited unfair labor practices on the part
of unions. A Taft Hartley account is an account subject to the
collective bargaining agreement created as a result of negotiations
between management and unions pursuant to the Taft-Hartley Act.
Table of Contents Copyright 2005 Money Management Institute. All
Rights Reserved Page 63 of 68 64. The Money Management
InstituteData Standards CommitteeStandards Strawman2nd
EditionRequest for Creation of or Amendment to Standard
MessagesRequests for new or amended messages should use the
attached form(s) and be addressed to any current working group
member of the MMI Data Standards Committee. The committee convenes
on a quarterly basis. The committee will respond to the request
within two weeks after the next regularly scheduled meeting. The
proposed message or amendment should be unique, serve multiple
users, and be justified from a business perspective. Please be sure
to complete all necessary fields when submitting a request so the
proposal can be accurately evaluated. Valuation factors will be
based on industry need for messaging and the benefit to industry
participants.Upon analysis of the proposed message or amendment,
the Committee will respond accordingly to your request as
follows:New MessageAmended Message Suggested Message Approved
Suggested Amendment Approved Suggested Message Rejected Suggested
Amendment Rejected More Information RequiredMore Information
Required Standard Notification Already ExistsIf the Data Standards
Committee approves the request, it will be presented to the
Technology & Operations Committee and ultimately the MMI Board
of Governors for approval. Once approved, it will be sent back to
the Data Standards Committee for development. The development
process consists of three parts: Plain English, Data Requirements,
and Technical Working Group Review. The Plain English document
provides an overview of the purpose and details about the message.
Matrix fields are identified for each notification as either
mandatory or optional. Once the Plain English and Data Requirements
have been defined, the Technical Working Group reviews and
completes the notification. The Committee may be in contact with
you for additional detail as necessary. Implementation of the
suggested new standard will be prioritized and occur with other
regularly scheduled releases. Each release will be published on the
MMI website.Please be advised that changes to an existing
notification will require some technological enhancements. Appeals
may be presented to the chairperson(s) of the Data Standards
Committee. Copyright 2005 Money Management Institute. All Rights
ReservedPage 64 of 68 65. The Money Management Institute Data
Standards Committee Standards Strawman 2nd Edition MMI Data
Standards Notification Request Form This is a request for the
adoption of a new standards notification.Contact
Information:Name(s):Company Name:Company Address: Phone Number:Fax
Number:Email:Name of Proposed Notification: Business Purpose
(Provide examples on how this notification will be utilized):What
similar existing messages, if any, do not accommodate the need:
Anticipated Primary Users: Ex: Sponsor, Money Manager,
CustodianAnticipated Volume of Messages: Ex: Volume per
MonthDemonstrate how this notification will satisfy/benefit the
needs of many:Provide a listing of the anticipated fields that will
be utilized: What similar messages exist within other
systems/standards: Please provide examplesCopyright 2005 Money
Management Institute. All Rights ReservedPage 65 of 68 66. The
Money Management InstituteData Standards CommitteeStandards
Strawman2nd Edition Copyright 2005 Money Management Institute. All
Rights Reserved Page 66 of 68 67. The Money Management
InstituteData Standards CommitteeStandards Strawman2nd Edition MMI
Data Standards Notification Amendment Form This is a request for
the amendment of a standards notification. Contact
Information:Name(s):Company Name:Company Address: Phone Number:Fax
Number:Email:Name of Amended Notification: Business Purpose
(Provide examples on how the existing notification does not
suffice):What similar existing messages or fields, if any, do not
accommodate the need: What, if any, table