A matrix level is the level of control on a sub-account provided to a Firm or Fund using Networking.
The matrix level chosen by a Firm determines the activity allowed between a shareholder and a Fund. Each matrix level:
- Provides Firms with the flexibility to select options consistent with their business philosophy
- Identifies the:
- Reporting responsibilities of the Firm and Fund with regard to each sub-account
- Processing capabilities the Fund and Firm have in supporting the exchange of information for those sub-accounts
Matrix Level Guide
Networking Level & Responsibilities
The matrix level is the level of control on a sub-account provided to a Firm or Fund using Networking. The matrix level chosen by the Firm determines the activity allowed between the shareholder and the Fund.
There are three current matrix levels:
- Level Zero = Non-Networked Account or a Networked Trust Account when used in conjunction with a Trust Membership Indicator
- Level Three = Firm Controlled Account
- Level Four = Fund Controlled Account
The table below describes each of the three matrix levels of Networking.
|0 (zero)||Non-Networked Account||
For most Firms, Level 0 means non-Networked.
Exception: A Networked Trust Account is considered Level 0 if the Membership Indicator denotes a Trust.
|3 (three)||Firm Controlled Account||Firms maintain maximum control over the mutual fund assets in a customer’s account including:
|4 (four)||Fund Controlled Account||Firms allow the fund to maintain control over the mutual fund assets in a shareholder’s account.
Firms process a customer’s orders but the Fund provides all other services for the shareholder including all accounting and tax reporting.
Shareholders can deal with either the Firm or the Fund.
|Trust Networked Account||Trust Company Controlled Account||Trust Company maintains maximum control over the mutual fund assets in a customer’s account including:
The table below illustrates who is responsible for:
- Producing confirmations
- Preparing monthly and quarterly statements
- Tax reporting for investors
|Reporting Responsibility||Level Three*||Level Four||Trust Networked */ **|
|Confirm (Fund/SERV® Trades)||Firm||Fund||Trust Company|
|Confirm (Non-Fund/SERV®)||Firm||Fund||Trust Company|
|Monthly Statements||Firm||Fund||Trust Company|
|Quarterly Statements||Firm||Fund||Trust Company|
|Year-End Statements||Firm||Fund||Trust Company|
|1099B (Wire Orders)||Firm||Fund (as-of 1/1/2012)||Trust Company|
|1099B (Direct Liquidations)||Firm||Fund||Trust Company|
|1099 R/W2P (When Applicable)||Custodian/ Trustee||Custodian/ Trustee||Trust Company|
|5498 (When Applicable)||Custodian/ Trustee||Custodian/ Trustee||Trust Company|
|Proxies||Firm/ Fund||Fund||Trust Company|
|Interested Party Mailings||Firm||Fund||Trust Company|
*Direct Liquidations are not allowed.
** Trust Networked accounts at the fund should not be subject to withholding. If withholding is appropriate, it should be applied by the trust on the trust's record-keeping system. The trust is responsible for filing and reporting.
- "Custodian" is defined as the financial institution acting as the caretaker for a mutual fund’s assets.
- The tables found in this chapter should be used as a guideline. They are not a requirement of NSCC. They are the recommendations set forth by the participants of the Networking system themselves.