Nicsa’s recent webinar, The Pulse on Tailored Shareholder Report Implementation, brought together over 290 attendees, highlighting the growing importance of this regulatory change. Moderated by Michael Donowitz, VP of Regulatory Affairs at Broadridge, the webinar focused on the experiences and lessons learned by industry experts as they navigated the first wave of tailored shareholder report implementations.
Background on the Regulatory Landscape The SEC’s efforts to modernize fund disclosure in the U.S. have been in development since 2015 and aim to simplify shareholder reporting, improve clarity, and enhance the accessibility of key information. Similar movements are taking place globally, with Canada and parts of Europe considering similar updates to their investor disclosure requirements.
The Tailored Shareholder Report rule marks a significant shift, introducing streamlined, more readable reports designed to better inform shareholders while still meeting regulatory requirements.
Varied Insights & Impacts The rule has had wide sweeping impact on the industry and this webinar featured a distinguished panel representing various perspectives including:
Amy M. Fothergill, Vice President, Asset Servicing Product Developer at State Street;
Anu Patil, Vice President, Vendor Management Oversight at JP Morgan; and
Harsh Choudhary, Head of Product Management, Regulatory Communications at Broadridge.
Together, the panel covered all aspects of implementing Tailored Shareholder Reports, from composition to oversight, data management, and compliance.
Lessons Learned One major takeaway was the need for early planning. Many firms struggled with the tight timelines and the complexity of managing different elements of the reports, particularly the new SEC data-tagging requirements. Another key conclusion was that close collaboration between internal teams and external vendors helped mitigate issues and ensured that the reports met both regulatory and shareholder needs.
What Proved Most Helpful
- Investment in Technology: Firms that started preparing early by investing in the right technology to manage data, tagging, and report generation found the process more manageable. Being proactive with tech adoption was essential.
- Collaboration with Vendors: Working closely with external partners helped streamline the production process and ensure compliance.
- Clear Communication Channels: Having clear communication channels to streamline oversight processes can ensure that errors are caught early and compliance is maintained.
How Firms Are Leveraging AI
- Data Management and Tagging: Firms are beginning to explore the use of AI to assist with data tagging and management, ensuring that the information included in tailored reports is both accurate and efficiently processed. This was particularly important given the SEC’s data-tagging requirements.
- Improving Report Generation: AI is also being leveraged to optimize the report generation process, helping firms produce more accurate and compliant reports faster and with fewer resources.
Next Steps The panelists stressed that the first round of tailored shareholder reports provided valuable learning experiences. As firms continue to refine their processes, the focus will shift to optimizing report generation and ensuring that the reports deliver the intended value to shareholders. Data integrity, consistency in reporting, and enhancing investor understanding will remain key priorities.
Conclusion The Tailored Shareholder Reporting rule represents a significant step forward in regulatory modernization. While the initial implementation posed challenges, the industry has demonstrated a strong commitment to collaboration and continuous improvement. As firms adjust to this new reporting landscape, shareholders stand to benefit from more accessible, transparent, and informative disclosures.
Stay tuned for more updates from Nicsa as our member firms continue to fine-tune their reporting processes and learn from the first round of implementation.
Keep abreast of upcoming Nicsa webinars at learn.nicsa.org/webinars.
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