TheMoney Management Institute has hired a Merrill Lynch separately managed account veteran to oversee a new operations area set up to support MMI’s move to become a standards-setting organization. Gary Jones, a 17-year veteran of Merrill’s separately managed account platform and most recently director of marketing and communications, will be v.p. of industry operations, a newly created position. The board of the MMI has given the go-ahead to recommendations from consulting firm Accenture to create an alternate path to improving operations in the SMA industry, nixing plans by the National Securities Clearing Corp. to create a sole hub using proprietary message schema.
MMI hired Accenture last June to provide different operations options, after the industry failed to get critical support for the NSCC solution. Under the recommendations, NSCC could participate in an industry-wide solution, but wouldn’t be the sole hub. Chris Davis, president of the MMI, said the recommendations included having MMI set up a system of standardized communication that would be open to multiple competitors. MMI will continue to develop standard message formats for daily activities in the SMA world. These messages would then be sent between money managers and brokerage firms on everything from setting up new accounts to purchases and withdrawals.
Davis said NSCC would be an important competitor and service provider, but the non-proprietary method would also be open to vendors such as CheckFree Investment Services, Vestmark and Bank of New York.
Jones said the Accenture recommendation recognizes that longtime players in the industry want to continue to use the systems into which they’ve poured years of investment dollars. He said Accenture also recommended that the industry use the XML standard so firms could use the Web for transmission. MMI plans to create a standards testing facility for members and will oversee the certification process as well, he added. Time frames for implementation have not yet been finalized. A DTCC spokeswoman said NSCC has agreed to open its message schemas to the industry. “We are willing to open our schemas to demonstrate our commitment to the industry and to move us to greater efficiency. It’s an important first step.”