NSCC Multi-fund platform

[Guest Phil L]

Our TPA & consulting firm has been trading on the NSCC platform by going through Columbus Circle. We ran into a few problems and are now looking at Mid Atlantic. Does anyone out there have any experience with Mid Atlantic? I would love to hear from you. Thanks.

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[Guest]

I provide consulting to clients who are looking to trade via an NSCC platform. I would be very interested in hearing about the problems you are having with Columbus Circle.

I am currently working with a client who just started using the Mid-Atlantic platform. So far, they are very pleased. The one issue that I have with them is that they do not complete the mutual fund apps with the mutual fund companies (although they indicated they are working on this using the NSCC format). This may not sound like a big issue, but believe me, it is. They also do not provide tax withholding and remittance for participant checks. So you or the plan sponsor must do the withholding remittance and the 1099s. This may or may not be a big issue, but certainly doesn't make sense to me why they don't provide this.

I'd be happy to talk with you further about their link.

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Carol J. Ringwald

Senior Consultant

Shawmut Consulting Assoc.

[Guest Brad Brewer]

I handle the employee benefit services at a community trust bank. We are capable of utilizing any mutual fund family, but their are certain costs associated.

I have a general grasp of NSCC, but would like to learn more. Any suggestions?

[Guest Phil L]

I too am somewhat unfamiliar with the workings of the NSCC. It appears to be very interesting.

In response to Carol's question above, we have one significant issue involving the way Circle Trust handles dividends. As I understand it (I hope I get this right), it is not uncommon for Circle Trust to revise their numbers retroactively for a month end when they process dividends a week or two later. This process seems inconsistent with the whole idea of daily valuations.

Has anyone heard of this issue?

[Guest]

Phil, I have not heard that description of how Columbus Circle handles the dividends received from the mutual funds. My understanding is that they just pass back the dividend to you to be applied to the plan accounts. At that point, they apply the dividend to the account balances to reflect them in the new positions. You might want to contact them directly and have them give you a more thorough explanation.

The NSCC has a website available that gives an overall explanation of their processing. As I mentioned in my previous note, I'd be happy to talk with you further about how they work. Just give me a call at 904-620-8100 and maybe I can shed some light for you.

Also, there are other links available to you that have connections with the NSCC, such as Fidelity, Sungard/Expediter, First Trust of Denver, Wilmington Trust, just to name a few. There are new connections springing up everyday as this process matures.

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Carol J. Ringwald

Senior Consultant

Shawmut Consulting Assoc.

[Guest EricL]

We have been trading a few plans through Mid Atlantic for about 4 months. So far everything has worked out very well. The customer service is very responsive. However, the biggest impact is that all funds confirm T+1. I am not too familiar with the timing of NSCC confirms, but through SunGard-Expediter many of the fund families confirm T+2. I would be glad to try to answer any specific questions if you would like to post them or e-mail me directly.

[Guest bward]

Eric L - Love to talk to you about T+2 confirms and the NSCC. Many fund companies use DST to process mutual fund trades and this why any platform that links to a DST Family would receive this delay in a late day trading environment unless manual intervention is involved.

I can provide you some contacts at the NSCC to explain the process if needed.

Bob Ward

SunGard

Bob.Ward@SunGard.com

[Archimage]

In my old life, we used Columbus Circle and I found they had problems reconciling cash. It became such a big problem that we moved to someone else. I was not too involved with the process at the time so I don't know the details of it. But maybe this will help you and others in deciding what vendor to use.