The Markets February 5, 2007

DTCC to Launch Fund Prospectus Database

The Depository Trust&Clearing Corporation (DTCC) has unveiled plans for a July launch of its redesigned Mutual Fund Profile Service database, which it says will be a centralized repository for information in a fund's prospectus.
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A news release said the new offering, by DTCC’s National Securities Clearing Corporation subsidiary, will also include features providing users with fund distribution data as well as contact information and the processing capabilities of funds and firms.

The database will include information about:

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  • a fund’s investment objectives,
  • minimum and maximum investment requirements,
  • fee schedules,
  • breakpoint schedules,
  • linkage rules, and
  • other fund rules.

“This initiative will deliver major efficiencies to the industry by providing a single central resource for the dissemination of fund information and offering greater operational flexibility,” said Ann Bergin, managing director and general manager, DTCC Distribution Services, in the press release.

The announcement said that the new database is structured on four levels with the Management Company level first, followed by Share Class, Fund Portfolio and Security Identifier (CUSIP numbers provided by Standard & Poor’s) for each portfolio.

As part of the redesign, according to the announcement, DTCC will create new Web screens that will allow users to query and retrieve the same information on the screen that can be found in a fund’s prospectus.

More information is at www.dtcc.com.

Deals & People February 5, 2007

State Street to Buy Investors Financial for $4.5B

Boston-based State Street Corporation announced Monday that it has agreed to buy Investors Financial Services Corporation in a stock transaction worth approximately $4.5 billion.
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According to a press release from State Street, the purchase of the 17-year old company gives it greater capacity to offer services to institutional investors. Investors Financial Services, also based in Boston, offers investment services that include mutual fund, offshore and hedge fund servicing, custody, securities finance, cash management, foreign exchange and transition management.

Investors Financial Services Corporation shareholders will get 0.906 shares of State Street common stock, bringing to 62 million the total number of shares issued.

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If the transaction goes through, State Street will have $14 trillion in assets under custody, which includes $3.5 trillion in mutual fund assets under administration and will be servicing more than $340 billion in hedge fund assets.

“Investors Financial Services Corporation and State Street already share a similar focus, service model and customer type, which makes for a seamless and swift consolidation,” said Ronald Logue, chairman and chief executive officer of State Street, in the press release. State Street predicts pre-tax restructuring costs of $625 million to $675 million and puts pre-tax savings following the first two years of closing at $345 million to $365 million.

The greatest savings will come primarily from technology, staffing and real estate consolidations, the news release said.

Each board of directors has approved the acquisition, which is expected to close by the third quarter of 2007. The deal still requires approval by regulators and the shareholders of Investors Financial Services Corporation.

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