With so many firms thinking tactically when it comes to solving for Form N-PORT / N-CEN, it is refreshing that some recent conversations have seen mutual fund companies proposing to leverage their solution investment for other purposes beyond the rule. A significant amount of data needs to be centralized to complete the form, and there are many other stakeholders, beyond the SEC, that can benefit from being able to access this information readily.
In fact, without having to extend the universe of data being collected far beyond the N-PORT requirement, a firm that puts a fit-for-purpose data solution in place will not only have solved the complex data problem associated with the rule (30-40% new data sourced, quality controlled, and signed off in a third of the time in order to meet the monthly requirement) but will also have positioned themselves to serve strategically many business needs; think consultant databases, client reports, due diligence questionnaires, RFPs, fact sheets, third-party data vendors, fact sheets, even web pages.
All of these require subsets of fund and product information and are typically pulling this information from a multitude of sources with limited (if any) controls. To make matters worse, rarely is this data management function centralized, so the effort is being replicated many times over. Some firms have recognized the potential value in having one central product data store, but have never been able to successfully design a business case or get budget to solve the issue – until now.
Moreover, of course, these are only the business uses. From a regulatory perspective, there are many global regulations (including N-MFP, CPO-PQR, Form PF, Form 13F, and Form ADV, along with European favorites AIFMD, Solvency II, PRIIPs, and of course MiFID II) that require data management. The strategic benefits of having one regulatory middle-office to service all these nuanced data needs are compelling. Rather than creating cottage industries and silos to meet these requirements regulation by regulation, we are starting to see firms build out one technology solution with one operating model – N-PORT is a perfect opportunity for a US firm to put the foundations in place.
There are a multitude of vendors offering N-PORT solutions in the market, in most cases at an extremely high cost and limited to just solving N-PORT and nothing else. Mutual fund firms need to approach this opportunity strategically and identify partners that can help them think outside the N-PORT box, leveraging a necessary investment today for many other business and regulatory needs.