This paper aims to provide a practitioner's view on the key areas broker‐dealers need to evaluate while undergoing a mutual fund remediation exercise.
Abstract
Purpose
This paper aims to provide a practitioner's view on the key areas broker‐dealers need to evaluate while undergoing a mutual fund remediation exercise.
Design/methodology/approach
This article is based on the experiences of the author while working with various broker dealers in this area.
Findings
The takeaways are categorized in four sections. These are: assessing data availability and quality; defining remediation process and selecting associated algorithms; analyzing key business rules, and creating and managing an automated rules‐based engine. Each section details issues that need to be considered and analyzed, options available and the impact of such options.
Practical implications
Tackling the areas identified in the article can help firms in streamlining the process, making it predictable, consistent, transparent and auditable. It also helps in reducing the recurrence of these issues and provides a clear basis for other remediation exercises like NAV Transfers, breakpoint accuracy and market timing.
Originality/value
While there are several publications that explain the underlying problem, there is limited literature that details the issues and road‐blocks confronting organizations that need to undertake such an initiative. The paper addresses this gap and gives compliance professionals a checklist to ensure a smooth remediation process.