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Taking the risk out of mutual fund compliance: a seven‐step check list for safer, more cost‐efficient mutual fund sales

Jeff Levering (Vice President of Corporate Development and Business Strategies, NewRiver, Inc., Andover, Massachusetts, USA.)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 14 March 2008




The purpose of this paper is to explain the risk of bad mutual fund data for a financial services firm that sells mutual funds and to recommend steps a firm can take to ensure the reliability of its mutual fund data.


Explains problems caused by missing data, including the “breakpoint issue,” the best sources of mutual fund information, problems firms have retrieving and compiling that information, and weaknesses in a free service (the “Service”) provided by a well known industry utility and securities depository that related to coverage, completeness, and cost. Recommends seven actionable steps a firm can take to ensure the accuracy of its mutual fund data.


Firms offering funds may sell billions of dollars of funds every week, and maintain considerably more on their books, but frequently they pay scant attention to the accuracy of their mutual fund reference data. The breakpoint issue is alive and well today, and would seriously erode investor and regulatory confidence if this fact became better known. For many firms, discrepancies in data result from funds having one policy disclosed to the SEC while their distributors use entirely different ones. Firms now realize that ensuring accurate reference data is no longer an issue that can be avoided.

Practical implications

Rather than operating under the false assumption that critical data is accurate, make sure you dedicate the time to examine your organization's use of mutual fund data to ensure efficient, ongoing investor relations and to ensure the overall reputation of your firm.


Professional advice from an experienced vendor of compliance systems and software.



Levering, J. (2008), "Taking the risk out of mutual fund compliance: a seven‐step check list for safer, more cost‐efficient mutual fund sales", Journal of Investment Compliance, Vol. 9 No. 1, pp. 40-44.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

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