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
Modified March 04, 2025
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.
The table below illustrates who is responsible for:
- Producing confirmations
- Preparing monthly and quarterly statements
- Tax reporting for investors
*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.