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
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.
| Networking Level | Name | Description |
| 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 |
| 1099D | 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 |
| 1042S | Firm | Fund | 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.
Notes:
- "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.