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Create, Tag & File Tailored Shareholder Reports

Roadmap to SEC Compliance – Part 1 of 3.

With the compliance deadline for Tailored Shareholder Reports now measured in mere months and not years, a number of mutual funds have already made significant progress on plans to satisfy the new SEC requirements. Others have not. Given the complexity of the ruling, however, all funds will need to accelerate implementation.

Less than one year until the Tailored Shareholder Report deadline, are you ready?

Our team of regulatory and operational experts have analyzed the requirements for Tailored Shareholder Reports and Form N-CSR from every perspective. Given the impact on just creating these new reports and the implementation timelines for process automation, the report composition is likely the first capability you will need to address. These are the key elements of evaluating composition needs and approaches.

If you are looking for more information, we have included valuable links to insightful resources. Additionally, our dedicated Broadridge team is readily available to assist you in assessing your current composition process and where you need to be, as well as charting the most effective path to get there on time. Simply contact us for a complimentary assessment.

Evaluating the Impact on Your Fund Report Composition Process

This new ruling is about making reports clear and simple. That means open-end mutual funds and most exchange-traded funds (ETFs) will be required to create streamlined summary annual and semi-annual reports that are more concise and more visually engaging.

Take a moment now to view our snapshot guide to review a sample Tailored Shareholder Report and detailed content requirements. Visual aids make it easy to see what the SEC and shareholders expect from you. View the Tailored Shareholder Report: Snapshot Guide.

Most fund families are surprised when they calculate the sheer increase in the number of documents required. The Tailored Shareholder Report ruling requires fund families to create separate reports for each fund and each share class, which could entail a seven-fold increase (or more) in volume.

The biggest hurdles may arise around the number of documents that need to be created, plus new content and data requirements around benchmarks and expense calculations. For some, the increase in volume and strict deadlines present operational challenges when composing these new Reports. Some key considerations include:

How will you create a new Tailored Shareholder Report design template?

How many more documents will we need to create?

Are you staffed appropriately to compose these reports or is automation necessary?

Can SEC filing be streamlined with automated iXBRL tagging during composition?

What are the cost implications?

Outlining Your Composition Priorities

While there are clear content and format requirements, funds still have some flexibility. The intent of the ruling is to make these reports shareholder friendly and digitally engaging, but there are other factors to consider as well. How can these reports serve as an extension of your brand? How far do you want to go to create a more compelling print and digital experience? How much of a priority is cost (tied primarily to page count)? There is no wrong answer, it is critical that key individuals in your organization align around your priorities across marketing, fund administration, portfolio management, and operations.

Evaluating Composition Options

The key here is the number of documents you will need to create, generally driven by the number of Committee on Uniform Securities Identification Procedures (CUSIPs) you offer. Although all funds will be looking for ways to modify the composition process, firms with greater than 25 CUSIPs will likely start to see challenges with a more manual typesetting process. This will likely lead to the consideration of vendors offering automated composition solutions. With the right partner, you can find ways to streamline composition, reduce handoffs, and eliminate manual processes. Ask for capabilities overviews from your partners. Request product demonstrations. Obtain pricing estimates. Most importantly, share details about your current process so solutions can be customized to your needs.

What to Look for in Composition Automation

The ruling requires the Tailored Shareholder Report to be composed and iXBRL tagged at a fund and share-class level. This is an area where asset managers should focus on automation to increase scalability and drive operational efficiencies. What should you look for?

  • Templates that can accommodate multiple fund types, each with components that can be easily customized for each fund and class
  • Flexible data integration to automate and streamline data ingestion
  • Centralized content management allowing you to easily execute updates across documents, reducing the risk of version control
  • Proven automated iXBRL tagging integrated into your composition process to reduce downstream SEC filing workload
  • Multiple output types to cover color, black and white, and HTML versions, all with ADA-compliant output
  • Options for “hands-on” work in a user-friendly system and availability of managed services from your composition vendor
  • A solution that offers synergies with other steps of the process like distribution, web hosting and filing
  • System demonstrations that can bring solution descriptions to life

There are a lot of moving parts that impact many aspects of your organization including legal, fund reporting, operations, audit and marketing. Mutual funds and ETFs that string together a plan late in the game could miss out on efficiencies and create unnecessary tension among cross-functional teams.

Broadridge can help.

Our goal is to set the industry standard for fund families, automating workstreams to simplify and streamline implementation at every step. Five modular solutions work together to deliver a fully integrated, seamless execution, eliminating unnecessary handoffs that only add cost and delays.

Not ready for a solution decision? Contact us anyway. We’re happy to share our expertise so you can assess where you are and where you need to be.
Simply contact us.

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+1 800 353 0103North America
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