The Depository Trust & Clearing Corporation (DTCC) has launched an enhanced service to help financial firms and other market participants comply with a new January 2011 regulatory mandate requiring the reporting of cost basis information to investors and the federal government.
DTCC said its enhanced Cost Basis Reporting Service (CBRS) solves the technology and reporting challenges faced by the industry in meeting a key element of The Emergency Economic Stabilization Act of 2008, which requires financial intermediaries to pass cost basis information among one another when assets move among firms.
The service acts as a central communications hub that transmits cost basis information among broker/dealers, transfer agents, issuers, mutual funds and custodian banks in a secure electronic environment. It eliminates the need for market participants to undertake the expensive and time-consuming task of establishing potentially hundreds of new connections to transmit this information.
DTCC Solutions, a wholly-owned subsidiary of DTCC, leveraged the existing CBRS technology to build the enhanced service in less time – and at a lower cost – than it would have taken if the service had to be developed from scratch. The service also offers enhanced web access to give firms the flexibility to log on via the internet.
DTCC managing director for Clearance and Settlement/Equities Susan Cosgrove said the CBRS platform promotes standardization and centralization while also mitigating operational risk for customers, reducing the cost of compliance and improving overall processing efficiencies.
"As financial firms face heightened regulatory reporting requirements, we’re continuing to work closely with our customers to identify and develop solutions that will allow them to meet these new responsibilities in the most efficient and cost-effective manner possible," Cosgrove said.
The law includes requirements for financial intermediaries to transfer cost basis information on mutual funds by January 1, 2012, and debt, options and other securities by January 1, 2013.