October 19, 2012
TO: MMI Members
FROM: Roger Paradiso, Chair, MMI Model Standards Task Force
Gary Jones, MMI Consultant, Communication Standards
RE: Next Stage of Communication Standards Initiative
To move forward the communication standards effort, we have decided to issue a Request for Proposal (RFP) for the completion of the next stage of the managed solutions industry-supported initiative to create uniform data communication standards for managed accounts.
The next phase, which will focus on model portfolios, builds on a broader initiative under way for nearly a decade by MMI to improve data communication between the sponsors, investment managers, broker-dealers, and custodians that serve the managed accounts industry. The standards are designed to minimize risk, reduce costs, and improve the operational efficiency of the managed solutions industry, paving the way for future growth and expansion.
“At this juncture,” said Christopher L. Davis, President of MMI, “in assessing our objectives, we have made a strategic decision to adopt the same approach that we took with the successful MMI Sales Data Initiative. In that undertaking, after an RFP process, we selected Coates Analytics as a strategic partner whose role is to align its capabilities with the sales data reporting and analysis needs of MMI members.
“Similarly, to move the standards effort forward in a way that maximizes its utility and value to our members, we will now be seeking – with industry input – an infrastructure provider able to deliver an optimum communications utility that addresses the needs of our industry and MMI members as we see them today, as well as enhancements we envision for the future. As at the outset of this project, we remain committed to an open-source XML messaging standard – and invite all industry members to play a role in developing the protocols and schema.”
“This is a project that the industry supports because the lack of uniform communication standards only serves to inhibit industry growth,” said Roger Paradiso, Managing Director and Director of Consulting Group’s Investment Solutions and Portfolio Development at Morgan Stanley Wealth Management, who also serves as chairman of the MMI Board of Governors-level task force that oversees the standards effort. “We are particularly grateful to DTCC, the Depository Trust & Clearing Corporation, for its long-time support of our industry and its many contributions in bringing the standards project to its current stage.”
The model portfolio standards project will continue to be overseen by the task force of MMI Governors formed in June of this year. The task force both directs and supports the MMI Managed Account Solutions Standards (MASS) Committee, which has been the driving force behind the standards initiative since its inception in 2003. The task force will oversee the process of issuing the RFP—which is expected to be released by the end of October—as well as evaluate the potential candidates and select the provider that MMI will partner with on this important initiative.
October 19, 2012