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The challenge with traditional distribution models
A filing may be accepted by the SEC, but if the corresponding distribution process is never initiated, required investor communications may be delivered late or not at all. The challenge is ensuring regulatory events automatically trigger the appropriate distribution workflows, delivering the correct documents through the appropriate channels.
Many variable product and retirement plan issuers continue to rely on fund companies to initiate distribution. Although the workflow is relatively standard, the process depends on the successful execution of activities by multiple parties, manual communication and operational coordination, increasing the risk of human error and increasing regulatory and compliance risk.
As variable product investment options and retirement plan lineups change, regulatory requirements evolve, and resource availability challenges increase, manual workflows become increasingly difficult to effectively manage. Without real-time visibility into filing activity and document distribution status, issuers have begun to identify distribution gaps and have expressed concerns about maintaining compliance.
Compliance and operational risks
Missed or delayed distributions can create challenges and avoidable consequences, including:
- Compliance risk exposure with SEC and FINRA requirements extend well beyond operational inefficiencies
- Increased audit complexity due to incomplete or inconsistent reporting records
- Operational inefficiencies caused by manual monitoring, reconciliation and follow-up
- Reputational risk
These challenges are leading companies to evaluate existing workflows and introduce automated processes to:
- Reduce transaction settlement compliance timelines
- Reduce compliance risk
- Increase operational transparency throughout the distribution lifecycle
- Improve overall operational efficiency
What modern distribution solutions should deliver
As part of a review of their distribution strategies, companies are looking for solutions to adopt greater automation, transparency and control.
Key capabilities include:
- Automated monitoring and real-time visibility of regulatory filings to identify distribution-triggering events
- Event-driven workflow automation to initiate distribution based on predefined business rules
- Participant-level document assembly and distribution processing to ensure the correct documents are delivered to the appropriate investors
- Comprehensive audit tracking of distribution events and delivery channels
Toppan Merrill is Ready to Help
Toppan Merrill delivers end-to-end regulated communications solutions designed specifically for the financial services industry. By combining automated EDGAR monitoring, intelligent workflow automation, participant-level entitlement processing and comprehensive audit reporting, organizations gain greater visibility, control and confidence across the entire distribution lifecycle.
If you have questions about modernizing your distribution strategy or would like assistance evaluating your current processes, the experts at Toppan Merrill can help. We also offer a range of additional resources to help financial services organizations navigate evolving regulatory requirements with confidence.
