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February 16, 2005 at 07:00 PM
A major securities clearing company still wants to help sellers of separately managed accounts automate their business.[@@]
The company, the National Securities Clearing Corp., New York, earlier this month withdrew a request for the U.S. Securities and Exchange Commission to give it permission to set up a standardized electronic communication system for the broker-dealers who sell SMAs and the money managers that manage the accounts.
But the withdrawal was the result of a change in the way NSCC wants to do the job, not the result of a decision to cancel the job, according to NSCC spokeswoman Karen Gregory.
A separately managed account is a kind of one-investor mutual fund. Many wealthy investors like SMAs because SMAs give them more control than mutual funds do over investment holdings, asset turnover and distributions of taxable income.
At many SMA organizations, “the back office operation is still in manual mode,” Gregory says.
The Money Market Institute, Washington, an SMA trade group, began working with NSCC several years ago to set up the Separately Managed Accounts Service, a system that could help automate SMA communications.
