Barry McConville, GIS global director of sales and marketing explained that GIS created the interface in response to the needs of MFACT clients and in anticipation of the needs of future users. "Fair value pricing supports the mutual fund industry in the valuation of international equities during periods of high market volatility," McConville said. "This enhancement is evidence of the collaboration between Global Investment Systems and FT Interactive Data and our commitment to continuing our 10-year relationship with FT Interactive Data to offer our clients market leading solutions."
Currently, seven mutual fund Boards of Directors have approved the use of FT Interactive Data's Fair Value Evaluation Service and more than 25 mutual fund companies are testing the Service. "FT Interactive Data's Fair Value Service is earning strong support from the mutual fund industry, " said Peter Ciampi, a principal architect of the product. "Our clients are looking to us to assist them with fair valuing their international portfolios. With the interface between MFACT and FT Interactive Data, mutual fund companies will now have a flexible and convenient way to receive our Fair Value Evaluation Service."
MFACT is a fully integrated system that addresses all the major functions of mutual and pension fund accounting and administration. For any organization managing or administering such funds, MFACT is designed to meet the investment management, portfolio accounting, daily NAV calculation, complex securities and foreign exchange considerations, as well as regulatory compliance and reporting needs.
"Fair value pricing combats market timers in instances where the international markets, particularly the Asian market, are hours behind the U.S. markets," said McConville. "As a result, the NAV international funds calculate at 4 p.m. Eastern Time is based on equity prices that may be a half-day old. Market timers use this time delay to predict whether an equity will rise or fall the following day and buy or sell accordingly. By unfairly leveraging the difference in time zones, market timers have been able to make significant returns at the expense of fund shareholders."
By using FT Interactive Dataâs Fair Value Service, MFACT clients can receive a fair value evaluated price by approximately 4:30 p.m. Eastern Time for most equity securities traded in Pacific and European time zones. For auditing purposes, MFACT stores and highlights these prices for future reference.
Safeco, headquartered in Redmond, WA, with 25 mutual funds, has used the interface for more than a month. "We needed this interface between MFACT and FT Interactive Data and GIS made that happen," said Dave Longhurst, vice president and controller of Safeco. "It is vital that we receive this level of responsiveness from GIS."