FAS Conference 2013

FAS Conference 2013June 6th - 9th

FAS Conference 2013

Agenda

• Industry Initiatives

• Industry Trends

• Innovative Solutions

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FAS Conference 2013

Industry Initiatives

FAS Conference 2013

Point of Sale (POS) Regulatory Update

• 3-stage phased implementation

• Stage 1 – production, filing, posting of Fund Facts to a fund company website, and delivery of Fund Facts under exemptive relief – since 2012

• Stage 2 – delivery of Fund Facts to satisfy current prospectus delivery requirements – final rule is expected this month

• Stage 3 – POS delivery of Fund Facts for mutual funds and summary documents for other types of publicly offered investment funds - in the future

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FAS Conference 2013

Point of Sale (POS) Regulatory Update

• Exemptive Relief – Early Use of Fund Facts (currently in place)

• Smart Document Fulfillment (SDF) product development complete

• Smart Prospectus is transitioning to Fund Facts fulfillment

• 6 dealers already implemented and in production, number of implementations on the way

• Broadridge is ready to implement the rest of the Smart Prospectus clients

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FAS Conference 2013

Client Relationship Model (CRM)• CRM – 2 new rules to be interpreted and defined which may impact

securities processing:

• CSA National Policy 31-103 has been published – awaiting IIROC rules

• Pre-charge disclosure – July 15, 2014

• Disclosure for debt securities on confirms – July 15, 2014

• Market valuation of securities – July 15, 2015

• Addition statements receiving compensation – July 15, 2015

• Book cost/original cost – July 15, 2015

• Annual statement reflecting compensation – July 15, 2016

• Performance reporting – July 15, 2016

• New requirements will have an effect on:

• Account opening information

• Transaction confirmations

• Account statements and reports 5

FAS Conference 2013

FATCA • FATCA – starting in 2014, first reporting due March 31,

2015

• The Canadian Inter-Governmental Agreement (IGA) on recordkeeping and processes

• What will this look like

• When will it be published

Government Changes (CRA, QRA & IRS)• Continued changes for forms and files for tax reporting

particularly Quebec

Foreign Transaction Tax• Various countries, rules, rates, times

Saskatchewan RESP Grant 6

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FundSERV

• ESG 23 – June 2013

• FATCA fields – Fall 2013

• ESG 24 XML file changes – June 2014

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Industry Trends

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Transitioning to Electronic Delivery

• Canadian Experience• 2.7 million proxy notifications sent by e-delivery, a 14%

increase year over year • Supports Corporate Responsibility initiatives

• U.S. Experience• 35.4 million proxy notifications sent by e-delivery, a 13%

increase from the prior year

• Mobile• Over 445,000 votes cast through Mobile ProxyVote.com,

representing a four fold increase over 2011 use

• Corporate Social Responsibility (CSR)

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FAS Conference 2013

Notice and Access (N&A)

• Broadridge held issuer educational roadshows in Vancouver, Calgary and Toronto in late 2012 to rollout N&A to issuer clients

• CSA released rule on November 29, 2012 with effective date of February 11, 2013

• Use of N&A only available for meetings that occur on March 1, 2013 and after

• NOBO lists can be requested without using a Transfer Agent

• Broadridge micro-site created “noticeandaccess.ca” to assist issuers with understanding N&A, extensive FAQ’s available for reference

Statistics• Based on 2013 Proxy Season sample size (108 issuers)

• No negative impact to voting for issuers who used N&A• Savings have been realized by Issuers regarding their overall costs 10

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End-to-End Vote Confirmation

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• Strategic initiative for Broadridge (US, Canada & 5 other markets)

• Provide additional transparency to the marketplace

• What is a Vote Confirmation?

• Vote received by the tabulator

• Vote accepted and processed by the tabulator

• Vote certified as counted at the meeting

• U.S. Stats Update

• Building on the success of the initial United Health Care (UHC) pilot from 2011, four U.S. issuers (including UHG) participated in the end-to-end vote confirmation process in 2012

• Interest continues to grow and 6 U.S. issuers have offered their retail and institutional investors’ end-to-end vote confirmation during the 2013 proxy season

• Companies that have been in the program believe it is a good public relations program – best practice

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Digital Communications

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• Content providers have witnessed a fundamental shift in how consumers receive and ingest content

• Driven by proliferation of tablets, mobile devices, “apps”, and ubiquitous high speed Internet connectivity

• Impacts all forms of media: books, magazines, movies, music, and communications

• By taking advantage of these new technologies, firms can:

• Replicate the offline experience digitally through tools consumers select

• Increase the effectiveness of communications programs

• Decrease the cost of both client servicing and communication programs

• Two primary challenges to making these benefits real include:

• Making upfront investments to integrate into each channel

• Making ongoing investments in underlying capabilities and managing the technology and complexity, including multi-channel distribution, interactivity, preference consent and capture, data security, channel insight and analytics, and audit controls and compliance

FAS Conference 2013

Re-Imagining Consumer BehaviorSource: KPSB Internet Trends 2012 – Mary Mercer

Source: KPSB Internet Trends 2012 ‐Mary Meeker 

FAS Conference 2013

What if we could Re-Imagine Mail?

FIRM WEB SITES E‐MAIL SOCIAL

BANKING INVEST

CARDS LENDING

Envelopes And Static Documents Dynamic Interactive ExperiencesAccessible AnywhereTODAY TOMORROW

Effective

Efficient

Support your brand

Strong Consumer Experience

Ensure Compliance

Enhance Relationships

GLOBAL DIGITAL MAIL FUTURE

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Innovative Solutions

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Broadridge Fluentsm

Fluent is a communications exchange that centrally manages communications across internal and external channels supporting customer choice.

Fluent will:

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Enable new communication channels (approved by client)

Validate client identities across channels

Capture preferences and consents on behalf of client

Facilitate distribution of content across consumer channels

Ensure security and regulatory compliance

Provide insight into the effectiveness of communications

Provide comprehensive audit trail to measure compliance

BROADRIDGEFLUENT

CHANNEL MGMT

PREFERENCE

IDENTITY

INSIGHT

Innovative ConsumerExperience

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MSWEB SITE(S)WEALTH BANKING

E-MAIL SOCIAL FUTURE

GLOBAL DIGITAL MAIL

NEWSTANDS / TABLETS

ClientStaff & Systems

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Broadridge Fluentsm contains three basic components

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Sources:

Broadridge Platforms• Proxy Plus• Post Sale• Transaction Reporting• Marketing

Communications

3rd Party / Client Platforms• Client Transaction

Reporting • Education Materials• Account Onboarding• Marketing Systems

Key Capabilities:

Identity Management• Consumer Validation• Preference & Consent

Management• Account Identification

Distribution Management• Interfaces between the

sources and channels

System Management

Reporting/Audit

Channels:

Client Channels• Broker Websites• Advisor Platforms

3rd Party Channels• Canada Post• US Digital Mail – Volly,

Manilla• Global Digital Mail• Devices & Newsstands • Social Networks

BR Channels• Forefield• Investor & Advisor

Mailbox

SOURCESIntegration with internal and external mailing / distribution / content

platforms

FRAMEWORKPrimary Services providing

management and connecting sources to

channels

CHANNELSHandles messaging and

information exchange with Client, 3rd party and Broadridge channels

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BR tools enable Digital mail to be interactive … pulling clients back to portals or providing tools within the mail they open

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Interactive Capabilities

Integrated CommunicationsIntegrates advisor and marketing communications with standard brokerage communications, improving a client touch point and enhancing the relationship

Client Logo

Client

Client Logo

Client

Take ActionAllows for clients to respond to an action within the mail they open

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Driving Electronic Delivery

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• Drive Investor preferences to electronic delivery by offering products and services that support “e” distribution

Solutions

• E-SP Lite• electronic delivery of transaction confirmations, Fund Facts,

and other disclosure documents• Quick Response (QR) Codes

• 2 D bar code for use with smart mobile devices to allow direct internet site access

• ProxyVote.com• Smart Disclosure • Broadridge Financial Requests

• Tax Form Plus - e-tax• Electronic delivery of tax forms

FAS Conference 2013

Driving Electronic Delivery

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Smart Advisor - a tool which allows Advisors to electronically send and track receipt of any document based on client preference

• Incorporates robust document delivery tracking for compliance reporting and analytics reporting

• Utilizes Smart Library & Private Library capabilities

• Documents are available for delivery without the need of a confirm or trade details

Notice and Access enables and encourages e-delivery

• Ancillary Services created to support Investors

• Standing instruction preference collection

• Material warehousing and fulfillment service – toll free line and automated material fulfillment

• Toll free notice and access inquiry line

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Business Process Outsourcing (BPO)

• The Financial Services industry has embraced BPO for 4 primary reasons in the past year:

• Cost savings

• Operational transformation

• Ability to enter new markets and expand capabilities

• Reduce up-front investment and accelerate implementation time

• Need for both discrete functions (e.g. reconciliations) and entire back office support models

• Ability to onshore (i.e. Toronto) and offshore functions

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FAS Conference 2013

Enhancements – Transactional Services

Smart Document Fulfillment

• Delivery of summary disclosure documents for other kinds of investments, as mandated by the CSA

• Expanded rebate program

• Enhanced packaging to reduce mailing costs

Smart Kits

• Suitable for full service and correspondent business models

• CRM account opening disclosure, client/advisor relationship content, regulatory information – embedded CIPF/IIROC pages automated to back office new account information

• Client lifecycle communications

• Supports marketing campaigns22

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New Solutions – Transactional Services

Smart Statements – Innovative Messaging

• New offering – Fall 2013

• Monthly, quarterly, annual statements with client defined messaging (client controlled and executed)

• Out-sourced or in-sourced models

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Enhancements - Dataphile

• BR Mobile

• Corporate Action Module

• Bridge Messaging

• Web Account Opening Wizard

• CRM-1 changes for suitability

• Tax Reporting Forms & Output

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Enhancements - BPS

• Realized Gain/loss Reporting

• Option Expiry and Assignment

• Order Suitability

• CDCC Phase 2

• DTC ID confirms

• Tax Reporting Forms & Output

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FAS Conference 2013

New Canadian Solutions - Brokerage

• Aspire Performance Reporting

• Global Corporate Actions

• FinancePro

• ClearancePro

• PROActive Reconciliations

• Portfolio Risk Management

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FAS Conference 2013

Questions?

Thank you.