412 Customer Account Transfer Section, Inc. A Section of SIFMA - 1 ACATS Fall Seminar 2011 Welcoming...

412 Customer Account Transfer Section, Inc. A Section of SIFMA - 1

ACATSACATSFall Seminar 2011Fall Seminar 2011

Welcoming Remarks

Fidelity Investments

Host Firm


ACATSACATSFall Seminar 2011Fall Seminar 2011

Opening Remarks

Derek Yen – Edward Jones

SIFMA CAT Section Board


CNS ACATS/Non-CNS ACATS Settlement Proposal

Louis LeporeLouis LeporeDTCCDTCC


AgendaAgenda

I.I. Non-CNS ACATS Non-CNS ACATS Mutual Funds ProposalMutual Funds Proposal DTC Eligible (but not CNS eligible) DTC Eligible (but not CNS eligible)

Assets ProposalAssets Proposal

II.II. CNS ACATS ModificationsCNS ACATS Modifications

III.III. ACATS Default PricingACATS Default Pricing

IV.IV. PTF Transfer EnhancementsPTF Transfer Enhancements

V.V. ACATS StatisticsACATS Statistics


Non-CNS ACATS Non-CNS ACATS Risk TodayRisk Today

If NSCC ceases to act for aIf NSCC ceases to act for a Member and initiates a close- Member and initiates a close-out of its account, non-CNS ACATS money incentive out of its account, non-CNS ACATS money incentive charges may be reversed as they are not guaranteedcharges may be reversed as they are not guaranteed

Many of these assets settle away from DTCCMany of these assets settle away from DTCC This may create settlement exposure for Members as This may create settlement exposure for Members as

transactions may have settled versus money in the various transactions may have settled versus money in the various settlement market placessettlement market places

This may require contra Members to negotiate claims of This may require contra Members to negotiate claims of settlement reversal money incentive charges directly with settlement reversal money incentive charges directly with the SIPC trustee the SIPC trustee

Industry working group consisting of SIFMA CAT and SOD Industry working group consisting of SIFMA CAT and SOD Member firms, Services Providers and Regulators was Member firms, Services Providers and Regulators was created to address these issues created to address these issues


Mutual Funds Proposal Mutual Funds Proposal ModificationsModifications

1)1) Addition of Settle-Prep Status 300 to all non standard ACATS transfers Addition of Settle-Prep Status 300 to all non standard ACATS transfers that contain a mutual fund asset with settlement location 10 (ACATS- that contain a mutual fund asset with settlement location 10 (ACATS- Fund/SERV)Fund/SERV)

Ensures ACATS settlement date of transfer always equals last day Mutual Fund Ensures ACATS settlement date of transfer always equals last day Mutual Fund Company can respond to fund re-registrationCompany can respond to fund re-registration

Impacts the following non-standard transfer types:Impacts the following non-standard transfer types: Partial Transfer Receiver (PTR), Partial Transfer Deliverer (PTD) and Residual Credit Partial Transfer Receiver (PTR), Partial Transfer Deliverer (PTD) and Residual Credit

(RCR(RCR)) Testing made available in NSCC’s PSE test environment as of August 1, 2011Testing made available in NSCC’s PSE test environment as of August 1, 2011 Production implementation scheduled after close of business on October 20, Production implementation scheduled after close of business on October 20,

20112011

2)2) Segregation of mutual fund transaction activity (settlement location 10 Segregation of mutual fund transaction activity (settlement location 10 ACATS- Fund/SERV) within NSCC money settlement code 007ACATS- Fund/SERV) within NSCC money settlement code 007

Original incentive charges for these assets will be removed from NSCC money Original incentive charges for these assets will be removed from NSCC money settlement code 006/008 for consolidation and tracking purposessettlement code 006/008 for consolidation and tracking purposes

Acknowledgement reversal charges will continue to be applied under NSCC Acknowledgement reversal charges will continue to be applied under NSCC money settlement code 007 money settlement code 007

ACATS Settlement Report Autoroute #02090712 will be updated with new total ACATS Settlement Report Autoroute #02090712 will be updated with new total sectionssections

““Totals Included in Net Cash 007” and “Totals Not Included in Net Cash 007Totals Included in Net Cash 007” and “Totals Not Included in Net Cash 007”” No testing available as there are no NSCC programming modifications No testing available as there are no NSCC programming modifications

requiredrequired Production Implementation scheduled after close of business November 3, Production Implementation scheduled after close of business November 3,

20112011


3)3) Creation of new Mutual Fund Reversal Files for a Creation of new Mutual Fund Reversal Files for a Member close-out eventMember close-out event

4)4) Creation of NSCC Settlement Category Code 34 for posting of mutual Creation of NSCC Settlement Category Code 34 for posting of mutual fund asset incentive money reversals resulting from a Member close-out fund asset incentive money reversals resulting from a Member close-out eventevent

Important Notices A# 7213, P&S# 6783 dated May 19, 2011 Important Notices A# 7213, P&S# 6783 dated May 19, 2011 (revised June 8, 2011) and Important Notice A# 7244, P&S# (revised June 8, 2011) and Important Notice A# 7244, P&S# 6814 dated July 13, 2011 outline all the modifications6814 dated July 13, 2011 outline all the modifications

Modifications (continued)

Mutual Funds Proposal Mutual Funds Proposal

MRO Reversal MRO Comma Delimited

Production Autoroute# 02091076 02091077

Production Implementation November 4, 2011 November 4, 2011

Features Programming required; Empty file distributed daily when no event

occurs

No programming required; File distributed only when

event occurs

“Canned” Test Autoroute# 02981076 02981077

Testing Available August 1, 2011 August 1, 2011


DTC Eligible (Non CNS Eligible) ProposalDTC Eligible (Non CNS Eligible) ProposalConceptual Proposed SolutionConceptual Proposed Solution

Members would settle assets “free of value” on ACATS Members would settle assets “free of value” on ACATS settlement datesettlement date

NSCC would utilize its Obligation Warehouse (OW) to track the NSCC would utilize its Obligation Warehouse (OW) to track the settlement status of these ACATS transactionssettlement status of these ACATS transactions

NSCC would apply incentive charges only on those transactions NSCC would apply incentive charges only on those transactions which have not completed or failedwhich have not completed or failed

Members would receive instructions from NSCC to re-price the Members would receive instructions from NSCC to re-price the settlement money on these failed transactions to the original settlement money on these failed transactions to the original ACATS market valueACATS market value

Members would subsequently settle these failed transactions Members would subsequently settle these failed transactions versus the original ACATS market value versus the original ACATS market value

Next StepsNext Steps Finalize this solution with industry working group – Q4 2011 Finalize this solution with industry working group – Q4 2011 Design this solution – Q1 2012 Design this solution – Q1 2012 Implement this solution - Q4 2012Implement this solution - Q4 2012 Finalize and design a solution for the remaining Non-CNS ACATS Finalize and design a solution for the remaining Non-CNS ACATS

settling assets (i.e., government securities) – Q4 2012settling assets (i.e., government securities) – Q4 2012


CNS ACATS ModificationsCNS ACATS Modifications

As a result of the “CNS for Value” initiative, ACATS As a result of the “CNS for Value” initiative, ACATS transactions can no longer be “netted” in CNS with other transactions can no longer be “netted” in CNS with other settling trade obligationssettling trade obligations

CNS ACATS transactions are not guaranteedCNS ACATS transactions are not guaranteed CNS ACATS transactions settle “free of value”CNS ACATS transactions settle “free of value”

Proposed SolutionProposed Solution NSCC proposes to create a new CNS sub-account just for NSCC proposes to create a new CNS sub-account just for

ACATS transactionsACATS transactions Sub-account will net ACATS transactions on settlement dateSub-account will net ACATS transactions on settlement date CNS ACATS long allocations (receives) and short covers (delivers) CNS ACATS long allocations (receives) and short covers (delivers)

would occur through a new DTC account (i.e., 889)would occur through a new DTC account (i.e., 889) Open transactions on ACATS settlement date will net with regular Open transactions on ACATS settlement date will net with regular

CNS transactions after money settlement completed and 100% of CNS transactions after money settlement completed and 100% of the market value has been collected on open failsthe market value has been collected on open fails


ACATS Default ACATS Default PricingPricingCurrent ProcessCurrent Process

When ACATS cannot find a price for a security it uses the greater of the submitter’s value or the default price determined by the Asset Pricing category chosen by the submitter on asset validation

Currently, asset pricing categories EQU, FEQU, FDEB are capped at $20,000

New ProcessNew Process If ACATS cannot find a price for a security, always use If ACATS cannot find a price for a security, always use

submitter’s valuesubmitter’s value When entering assets in an ACATS transfer, the submitting firm When entering assets in an ACATS transfer, the submitting firm

should value each asset the same as it is reported on their should value each asset the same as it is reported on their customer’s statementcustomer’s statement

This was approved by both the SIFMA CAT Division and FINRA This was approved by both the SIFMA CAT Division and FINRA NSCC planning to implement change by Q2 2012NSCC planning to implement change by Q2 2012


Enhancements for PTF TransfersEnhancements for PTF TransfersI. Fund/SERV 018 Record – Support Passage of Cost BasisFund/SERV 018 Record – Support Passage of Cost Basis

The following field will be added on Fund/SERV 018 record and The following field will be added on Fund/SERV 018 record and extracted from ACATS “TI” record for a extracted from ACATS “TI” record for a Position Transfer Fund Position Transfer Fund (PTF) transfer type (PTF) transfer type onlyonly

Originating Deliverer Customer Account Number at Firm fieldOriginating Deliverer Customer Account Number at Firm field To be populated on all PTF transfers when firm = delivererTo be populated on all PTF transfers when firm = deliverer

No programming changes required for firmsNo programming changes required for firms

II. PTF- Gift IndicatorII. PTF- Gift Indicator ACATS will add code to system reject any PTF transfer whereby ACATS will add code to system reject any PTF transfer whereby

the firm is receiver and “pulling” the account from Fund the firm is receiver and “pulling” the account from Fund Company indicating it as a giftCompany indicating it as a gift


ACATS StatisticsACATS Statistics

Users Firm Type

141 Brokers

38 Banks

114 Mutual Funds (PTF’s Only)

Month Month Transfer Type Transfer Type # Submitted# Submitted

August 2011 Full (broker to broker) 253,229

July 2011 Full (broker to broker) 211,938

August 2011 Full (bank on at least one side)

4,917

July 2011 Full (bank on at least one side)

4,426

August 2011 PTF (firm and fund) 40,458

July 2011 PTF (firm and fund) 38,855


Questions?


Process Service Improvement Process Service Improvement Subcommittee Updates Subcommittee Updates

Evan Oliveaux Evan Oliveaux

National FinancialNational Financial

Steve GoodrichSteve Goodrich

TD AmeritradeTD Ameritrade


PSIS DefinedPSIS Defined

As of 8/13/11As of 8/13/11

126 Members126 Members

The Process and Service Improvement The Process and Service Improvement Subcommittee looks to leverage new Subcommittee looks to leverage new

technology and assess alternative solutions technology and assess alternative solutions to improve transfer processes. to improve transfer processes.


Working GroupsWorking Groups

Regulator

y

Mutual Funds 27

Best Practices 27

Non-ACAT 27Regulatory 24Client Experience 19

PSIS Chair 2

Grand Total 126

Non-ACAT

Mutual Funds

BestPractices

ClientExperienc

e


Recent Working Group Recent Working Group TopicsTopics

Client Experience Working Client Experience Working Group:Group:

• Non-transferable fund Non-transferable fund communication analysiscommunication analysis

• Carryover of dividend Carryover of dividend instructions for equities instructions for equities opportunityopportunity

• Explore timing of ACAT Explore timing of ACAT compared to other compared to other methodsmethods

Mutual Fund Working Mutual Fund Working Group:Group:

• Reject AnalysisReject Analysis• PTF Best PracticesPTF Best Practices• Continued use of Continued use of

default registrations default registrations and impact on cost and impact on cost basisbasis

• PIER Report Update PIER Report Update for 2012for 2012

Non-ACAT Working Non-ACAT Working Group:Group:

• Non-standard TOA Non-standard TOA requirementsrequirements

• Firm survey’sFirm survey’s• Internal proceduresInternal procedures• Process Process

requirementsrequirements• Signature Signature

guarantee analysisguarantee analysis• Contact listContact listRegulatory Working Group:Regulatory Working Group:

• Rule 11870 educational Rule 11870 educational piecepiece

• Analysis on Important Analysis on Important NoticesNotices

• Rule 4522 – AI’s – how firms Rule 4522 – AI’s – how firms are handlingare handling

• Partner with Best Practice Partner with Best Practice groupgroup

Best Practices Working Best Practices Working Group:Group:

• Document best Document best practices on practices on corrections/reclaimscorrections/reclaims

• Transfer paperwork Transfer paperwork requirementsrequirements

• Settlement functionsSettlement functions


Firm Contact ListFirm Contact List

• Taken down from SIFMA siteTaken down from SIFMA site• PSIS group as the data gatherersPSIS group as the data gatherers• Michelle Padro has gathered contact Michelle Padro has gathered contact informationinformation

• [email protected]@etrade.com

n Firm NameFirm Namen AddressAddressn Contact NameContact Namen Capacity at firmCapacity at firmn Phone numberPhone numbern E-mail AddressE-mail Addressn Which PSIS working group interests you? Which PSIS working group interests you?


Questions?


Seminar Break

Seminar will resume in 15 minutes


Cost Basis Working Group Discussions

Ellen Bocina – Fidelity

Lydia Midwood – DTCC

Kelle Hennier – DST Systems

Derek Yen – Edward Jones


2005 20102009200820072006

Cost Basis Reporting . . . A Long Cost Basis Reporting . . . A Long JourneyJourney

Various versions of Draft Legislation

Comment Period Proposed Regs36 Q’S

Industry Dialog with GAO, Senate Finance, Joint Committee on Taxation and Treasury

Comment Period

20122011

Final Legislation to Implementation

2013

Options, Fixed Income

Stock

Mutual Funds


NovemberOctoberSeptember

Time… There’s Never Enough of Time… There’s Never Enough of ItIt

December

Development, Testing, Business Decisions, Communications, Training… 15 Weeks and Counting……………..

Testing: Systems, manual transfer statements, Monthly Statements; Confirmations…

Sign up for CBRS

Client Notification of default method

W-9 Solicitations for Corps.

Form Changes

Testing: CBRS

NICSA East Coast Regional Meeting, June 3, 2011, Sentry Centers, NYC 23

9 weeks to CBRS Changes13 weeks to systems freeze15 weeks to 1/1/2012

Testing: CBRS

Sign up for CBRS

Year-End Freeze

Production: CBRS


2011 Deliverables2011 Deliverables Identification of S Corporations vs. C Corporations

S Corporations (other than financial institutions)

Final IRS Form W-9 (Rev. January 2011) issued January 31, 2011

Supplemental Information - Reconciliation with the breakdown of lots on 1099-B

Box 1b: requires the date of acquisition (allows for combining non-covered, short-term covered and long-term covered lots)

Box 3: requires the reporting of cost or other basis of the security

Box 5: requires the reporting of disallowed wash sale losses

Box 6: requires notification if the security is uncovered

Box 7: requires reporting of the amount of the gain or loss

Box 8: requires identification of the gain or loss as short-term or long-term


Transfers – Relief ends 12/31/2011Transfers – Relief ends 12/31/2011

Matching

Manual statements

Corrections

Gifted / Inherited

Transfer Reversals

FRVs

RCLs

Other

Conversions

Third Party Transfers

File Changes

Mutual Fund Transfers – Fund/Firm and Firm/Firm

PTFs

Networking

Manual

Reversals

Industry Testing


2012 Transfer Statement Reporting

Transfer statement reporting will be required for shares eligible for average cost beginning in 2012

The majority, but not all, transfer reporting will occur through Depository Trust & Clearing Corporation (DTCC) cost basis reporting service (CBRS)

Joining CBRS service is not automatic Testing/validation will be required before 2012 Challenges are expected with non-CBRS transfers

Missing transfer statements Important for advisors and investment professionals to understand the

process Mandatory and optional requests for missing transfer statements

Transitional penalty relief for 2012 transfer statement reporting? Not currently expected


CBRS StatisticsCBRS Statistics

Firm Type Signed Up In Production

Brokers 99 71

Banks 32 20

Funds 54 0

Equity Transfer Agents/Issuers

74 34

Out of 54 Fund Companies:•70% expect to be in Production on 12/09/2011 or earlier•30% expect to be in Production on 01/02/2012

On average, 3% of CBRS records are system rejected, 2% are firm rejected


This year’s CBRS enhancementsThis year’s CBRS enhancements

Excel upload on WebDirect implemented in JuneExcel upload on WebDirect implemented in June Mutual fund enhancementsMutual fund enhancements

New requirements: Current Cost, Alternate Control New requirements: Current Cost, Alternate Control Number, Customer Account NumbersNumber, Customer Account Numbers

Exempt recipient accounts indicatorExempt recipient accounts indicator

System improvementsSystem improvements Remove ACATS editsRemove ACATS edits Removed Cost fields from Asset Input recordRemoved Cost fields from Asset Input record Changed some field names (e.g. Receiving Firm is now Changed some field names (e.g. Receiving Firm is now

Contra Firm)Contra Firm)


CBRS ResourcesCBRS Resources

http://www.dtcc.com/products/cs/equities_clearance/http://www.dtcc.com/products/cs/equities_clearance/cbrs.phpcbrs.php

User Guide, FAQs, Record layouts, Important User Guide, FAQs, Record layouts, Important NoticesNotices

CBRS Working GroupCBRS Working Group Internet-based training available later in 2011Internet-based training available later in 2011


Mutual Fund Cost BasisMutual Fund Cost Basis

Investment Company Institute (ICI)Investment Company Institute (ICI) Tax CommitteeTax Committee TA Advisory (TAAC)TA Advisory (TAAC) Broker-Dealer Advisory (BDAC)Broker-Dealer Advisory (BDAC)

BDAC CBR Task Force ActivitiesBDAC CBR Task Force Activities Lot DepletionLot Depletion ACATS-Fund/SERV, Networking, ManualACATS-Fund/SERV, Networking, Manual Best Practices / DocumentationBest Practices / Documentation

CBRS Steering CommitteeCBRS Steering Committee

SIFMA CAT Cost Basis Sub-CommitteeSIFMA CAT Cost Basis Sub-Committee


Mutual Fund Cost Basis – Firm/Fund Mutual Fund Cost Basis – Firm/Fund Transfers PTFTransfers PTF

ACATS PTF Push High Level Process Flow:

Dealer Firm (Deliverer)

Initiator

Dealer Firm (Deliverer)

Initiator

NSCC ACATS(DTCC)

NSCC ACATS(DTCC)

NSCC Fund/SERV(DTCC)

NSCC Fund/SERV(DTCC)

Fund Company(Deliverer)

Fund Company(Deliverer)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - DAY 1 - - - - - - - - - - - - - - - - - - - - - - - - - - -

Submits ACATS PTF

Creates Fund Registration

Transmits 018 Record to Fund

Company

Processes the 018 Record

Submits the 019 Record

to Fund/SERV

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - DAY 2 - 3 - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Sends 019 Record to

ACATS

Receives 019 Record and

Creates ACATS

Fund/SERV Stat File

ACATS Transfer

Status Ages to Settle Close

EOD

CBRS Record is Uploaded

DTCC Sends the CBRS Record to Fund Company

DTCC Receives the CBRS Record

from Firm

Submits the CBRS Record to

DTCC After PTF is Acknowledged

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - DAY 3 -18 - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

CBRS

CBRS

CBRS

CBRS


Mutual Fund Cost Basis – Fund/Firm Mutual Fund Cost Basis – Fund/Firm Transfers NetworkingTransfers Networking

Day 1

Day 2-4


Mutual Fund Cost Basis – Fund/Firm Mutual Fund Cost Basis – Fund/Firm Transfers ManualTransfers Manual


Questions?


Lunch BreakReminder

Lunch break Seminar will resume in 45 minutes


Resume Resume Cost Basis DiscussionCost Basis Discussion


Mutual Fund Cost BasisMutual Fund Cost Basis

ACATACAT Cost basis will transfer as it does today. Cost basis will transfer as it does today.

Non-ACATNon-ACAT Cost basis may not transfer today - no agreement on TCN or other Cost basis may not transfer today - no agreement on TCN or other

matching criteria. The pertinent detail may be on the mutual fund matching criteria. The pertinent detail may be on the mutual fund acknowledgement files:acknowledgement files:

Networking – F53 Transaction Type 2Networking – F53 Transaction Type 2 Manual – F55 Transaction Type 13Manual – F55 Transaction Type 13 "Manual Manual" "Manual Manual"

Firm/Firm Transfers for Mutual Firm/Firm Transfers for Mutual FundsFunds


Other Mutual Fund ConsiderationsOther Mutual Fund Considerations

Manual paperwork from the receiving firm to the Manual paperwork from the receiving firm to the delivering firm and logs / re-registration letters to the fund delivering firm and logs / re-registration letters to the fund needs to include needs to include

Revocation – sale, transfer or disposition– What Revocation – sale, transfer or disposition– What constitutes a transfer or disposition?constitutes a transfer or disposition?

TransfersTransfers Gifting in an average cost accountGifting in an average cost account Exempt Recipient Account Indicator on CBRS Master FileExempt Recipient Account Indicator on CBRS Master File Mutual Fund Transfer Reversals (code 33 and 34 on F55)Mutual Fund Transfer Reversals (code 33 and 34 on F55) Delivering firm on an ACAT loading Level 4 Mutual Fund Delivering firm on an ACAT loading Level 4 Mutual Fund

assetsassets Receiving firm on an ACAT default registration of Level 0 Receiving firm on an ACAT default registration of Level 0

or 4 Mutual Fund assetsor 4 Mutual Fund assets


Mutual Fund Cost Basis – Next Steps Mutual Fund Cost Basis – Next Steps

Fund Default ElectionsFund Default Elections CBR for Mutual Funds – DTCC Supplemental GuidesCBR for Mutual Funds – DTCC Supplemental Guides On boarding for Mutual FundsOn boarding for Mutual Funds

Complete DevelopmentComplete Development TestingTesting

Operational preparations for January, 2012Operational preparations for January, 2012 Important datesImportant dates

9/30 – CBRS Testing9/30 – CBRS Testing 11/18 – Production11/18 – Production 12/15 - Changes from IN 725612/15 - Changes from IN 7256 1/1/2012 – Penalty relief expires1/1/2012 – Penalty relief expires


Vision Concepts


Other Cost Basis ConsiderationsOther Cost Basis Considerations

Inheritance -Inheritance - User CUSIPsUser CUSIPs Foreign CUSIPsForeign CUSIPs TestingTesting Inherited/gifted shares to multiple Inherited/gifted shares to multiple

individuals – s/b pro-rata.individuals – s/b pro-rata. Working Exception Reports and Manual Working Exception Reports and Manual

Transfer StatementsTransfer Statements


Parking LotParking Lot

Mutual FundsMutual Funds F53 is currently sent to the submitting firm onlyF53 is currently sent to the submitting firm only Timing of CBRS records on PTF transfers and the need for a PEND Timing of CBRS records on PTF transfers and the need for a PEND

Process by the Firms or a Delay of 1 day by the Funds for CBRSProcess by the Firms or a Delay of 1 day by the Funds for CBRS Consistency of transaction types by Fund Companies on the F55Consistency of transaction types by Fund Companies on the F55 Industry consistency for "Manual Manual" Mutual Fund TransfersIndustry consistency for "Manual Manual" Mutual Fund Transfers

CBRSCBRS Add Cost field rules for fixed income assetsAdd Cost field rules for fixed income assets Edits to Exempt Recipient Accounts indicatorEdits to Exempt Recipient Accounts indicator Develop a universal format for the Transfer Control NumberDevelop a universal format for the Transfer Control Number Define how to use “Other Depository Deliveries” and “Physical Define how to use “Other Depository Deliveries” and “Physical

Movement Settlement” transaction typesMovement Settlement” transaction types Define how to use User CUSIPsDefine how to use User CUSIPs


What Will Confuse Your Customers

No lot selection after settlement date (cutoff) Covered versus non-covered securities (ETFs and UITs) New rules on the average Cost election (DRP covered vs

non-covered) Frustration about wash sales disallowance reporting Additional burdens for gifted and inherited shares Three-year and 18-month cutoffs for corrected 1099-Bs and

transfer statements.

Account defaults for lot depletion New Forms


Special Rules: Inherited and Gifted

Transfer statement must indicate that the transfer consists of an inherited security

Statement must report the date of death as the original acquisition date and the adjusted basis according to instructions or values provided by an authorized representative of the estate

If authorized representative of the estate does not provide the instructions or valuations regarding basis, the broker must report values if readily ascertainable

If values are not readily ascertainable, the transferor must indicate that the security is inherited but can otherwise report it as a noncovered security

Transfer statement must indicate that the transfer consists of a gift, report the date of the gift and include the adjusted basis, acquisition date and holding period of the donor

Statement must also report the fair market value of the security on the date of the gift (if known)

If the securities are subsequently transferred to a different account of the same owner, the additional gift related information set forth above must be included

If a transfer affects a “change of ownership,” the transfer must be reported as a gift (and the required information obtained, if available) unless the transfer is between persons for whom gift-related basis adjustments are inapplicable—transferor will need to know WHY

Gifted mutual fund and DRP shares received may not be average eligible

Inherited Securities Gifted Securities


Education, Communication and Education, Communication and Support Support

InternalBranchClient

Educational Tools Policies and Procedures Training Guides Webinars Round Tables White Papers Best Practice Documents

Support Needs Phone Calls Service Requests Self Service Tools Policies and Procedures Data Mining and Rejects Staffing Requirements


Open Issues DiscussionOpen Issues Discussion

What Have We Missed?What Have We Missed?


20132013

TO BE CONTINUED……TO BE CONTINUED……


Questions?

412 Customer Account Transfer Section, Inc. A Section of SIFMA - 1 ACATS Fall Seminar 2011 Welcoming...

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Transcript of 412 Customer Account Transfer Section, Inc. A Section of SIFMA - 1 ACATS Fall Seminar 2011 Welcoming...