Separate Account Exchange. How-To Guide for Investment Managers

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1 Separate Account Exchange How-To Guide for Investment Managers

2 Table of Contents I. INTRODUCTION... 1 II. INVESTMENT MANAGER APPROVAL PROCESS... 1 III. THE SEPARATE ACCOUNT EXCHANGE (SAE) ROSTER... 2 IV: PROXY INFO, REORG CONTACTS, AND DTC NUMBERS... 2 V: TRADING ACCOUNTS AT TD AMERITRADE INSTITUTIONAL FLEXIBILITY FOR IMS... 2 VEO... 2 FISERV... 3 FIX USING SUNGARD TRANSACTION NETWORK (STN) OR THOMSON AUTEX TRADE ROUTING (ATR)... 3 VI: TD AMERITRADE INSTITUTIONAL SHARED REP CODES... 3 VII: STEP OUTS... 4 VIII: TRADE AWAYS... 4 IX: PRIME BROKERAGE... 4 X: OPTIONS TRADING... 5 XI: ERROR RESOLUTION... 5 XII: FEE DISBURSEMENT... 5 XIII: PORTFOLIO DOWNLOADS... 5 XIV: IMPORTANT CONTACTS... 6 FAQ... 7

3 I. Introduction This document is provided by TD Ameritrade Institutional s Managed Account Solutions (MAS) team, and is intended to provide an operational guide for Investment Managers (IMs) participating in the Separate Account Exchange (SAE) program. Within this document, IM refers to a firm or individual with discretionary authority to manage the client assets of a Registered Investment Advisor (RIA). RIA will refer to the firm that actually owns the client relationship and has hired the IM to manage client assets on a discretionary basis. With SAE, IMs have discretion over investor portfolios custodied at TD Ameritrade. SAE accounts are dual-contract: the end client signs a service agreement with both an RIA and an IM. Individual RIAs that custody client assets at TD Ameritrade may have their own single-contract sub-advisory agreement with IMs to facilitate account acceptance. II. Investment Manager Approval Process You will need formal approval to trade at TD Ameritrade Institutional before you can manage accounts held in custody here. If you are not already a client or in the process of becoming one, please note that there are two different routes to obtaining approval, depending on your goals: If you want to manage client accounts for other RIAs on our platform, but not your own client assets, you will need to complete our Investment Management Services Application & Enrolment Package (IMSA). This process will be handled by Managed Account Solutions, which can be reached at managedaccountsolutions@tdameritrade.com. Some considerations: o Please make the MAS Team aware if an existing TD Ameritrade Institutional RIA has expressed an interest in using your products. o Inclusion on the Separate Account Exchange roster is not guaranteed or required for IMs successfully completing the IMSA, nor will we pursue on-boarding of every firm that seeks it. Factors affecting our decision include the IMs track record with managed account products (assets managed, age of products), GIPS compliance status, and presence on major databases. If you want to manage your own client assets as well as client accounts of other RIAs, you will need to contact Institutional Sales at , option 3, or by institutionalsales@tdameritrade.com to inquire about an Advisor Master Account Application. Managed Account Solutions is not involved in this process and on-boarding is at the discretion of the sales team. Once your firm is approved, a unique rep code will be created (any RIA using your firm s services will need to know this code when setting up the relationship). You will receive a welcome call from the dedicated Managed Accounts Service Team within business hours of this code s creation, at which time the code as well as other important information (account numbers, access to Veo, tech concerns) will be discussed. NOTE The following sections apply only to firms that have been approved to trade at TD Ameritrade Institutional. 1

4 III. The Separate Account Exchange (SAE) Roster Newly approved IMs (or existing clients seeking addition to SAE) must complete our Investment Management Questionnaire to be included on the roster. This questionnaire covers items such as strategy names, fees, trading preferences, proxy information, reorg contacts, DTC numbers, and Informa PSN (Plan Sponsor Network) listing data and serves as our record of your SAE registration. A publicly accessible version of the SAE roster, updated monthly, is posted to Veo as an Excel file, and can be made available upon request. Managed Account Solutions will reach out to all SAE participant firms on a regular basis to request that they review their SAE listings and notify us of any changes. You may also contact us at any time to update your listing by sending an to managedaccountsolutions@tdameritrade.com. A new questionnaire will be required from any firm adding strategies, though basic info can be added to the roster before the updated questionnaire is received. Changes will appear on the next publicly posted roster. IV: Proxy Info, ReOrg Contacts, and DTC Numbers TD Ameritrade Institutional needs accurate proxy, reorg, and DTC information whether you choose to be listed on the SAE roster or not. If you are not completing the Investment Management Questionnaire, this data should be shared with the Managed Accounts Service Team at instserv-map@tdameritrade.com. In either case you should update us promptly in the event of any changes V: Trading Accounts at TD Ameritrade Institutional Flexibility for IMs Investment managers can choose from three different trading interfaces. Veo Veo is TD Ameritrade Institutional s proprietary custodial web-based trading interface and the preferred choice for accounts custodied at TD Ameritrade. If you choose to use Veo, please fax a request on your company s letterhead to our Tech Services Group at or Your request should be signed by a Principal (authorized individual) of your firm and must include all of the following information: Your firm s block trading account number First and Last Name of each potential user A suggested User ID for each Designated contact person s name and contact information The TD Ameritrade Institutional rep code to be attached (see Shared Rep Code section below) Permissions: Which User IDs are to have account viewing only or trading ability; who has access to quotes and research; who should have the ability to post management fees; who should have access to Veo Express 2

5 Please make sure that all associates who require Veo access for trading and fees are set up BEFORE any shared rep codes are issued Once our Tech Services group receives the fax, they will grant access and a representative will call your designated contact person to review Veo/VEX and answer any questions you have. Requests for Veo access may also be sent to techservices@tdameritrade.com; this must originate with a Principal of the IM. NOTE Veo access is recommended, though not required, regardless of the trading method you plan to use. It is an important portal providing up-to-date versions of all forms and documents referenced throughout this document as well as access to research and product information. Fiserv You should place a call to your Fiserv representative and speak with an APL Specialist in the Technology Services department to request a connection to TD Ameritrade Institutional. Fiserv and TD Ameritrade will work together on your request. This process could take a few days to complete. However, if you are new to Fiserv, there may be an implementation period and time lag with Fiserv to get your system set up. Fiserv and TD Ameritrade will work with you to do some testing before going live once the setup has been completed. NOTE Trade files received by TD Ameritrade Institutional after market close will be submitted to the market on the next business day. Please keep this in mind to avoid duplicating orders. If you have any doubt regarding TD Ameritrade Institutional s receipt of Fiserv trade files, please contact our trade desk at , option 1. FIX using SunGard Transaction Network (STN) or Thomson AutEx Trade Routing (ATR) You should place a call to SunGard or Thomson and request a connection to TD Ameritrade. They will forward your request to the Business Product Group at TD Ameritrade Institutional. Technology Services will set up a time with you to conduct test trades. As with Fiserv, this process usually takes only a few days to complete, though there may be an implementation period if you are brand new to STN/Thomson. VI: TD Ameritrade Institutional Shared Rep Codes TD Ameritrade Institutional uses rep codes to identify which client accounts belong to an IM or RIA. A shared rep code allows both the IM and RIA to download portfolio management system (PMS) files for the client accounts over which an IM has discretion. Once an RIA has selected your firm to manage their client account(s), they must contact the Managed Accounts Service team to request a shared rep code. Once known, request that this code be added to your Veo User ID so you will be able to see and trade the necessary accounts. This shared rep code will be unique to the relationship. NOTE if you do not produce performance reporting and have no need for PMS downloads, we can simply add the applicable accounts for which you have trading authority to your Veo User IDs. This will prevent the need for a shared rep code but still allow the IM to trade the accounts. 3

6 VII: Step Outs Step Outs on SAE are permitted for equities only, and can be done as block trades. There is no special paperwork required other than a Limited Power of Attorney for the IM. Trades will be compared on Automated Confirmation Transaction (ACT). There is a $25 fee per trade per account. VIII: Trade Aways Trade Aways are permitted on SAE. Trade Aways are one-off trades per client account on bonds only and usually settle via DTC. If you wish to trade away from TD Ameritrade Institutional for a client account, you need to submit the trade details by fax, , or Veo and Veo upload on Trade Date. Our Trade Away Worksheet is available on Veo. NOTE equity and block trades are not permitted as generic Trade Aways. Contra firms must deliver directly to the TD Ameritrade Institutional underlying client account, not a block trade account. If you wish to block trade away you will need to establish a Prime Brokerage relationship. There is a Trade Away fee of $25 for each submission. The TD Ameritrade Institutional Trade Away Service Team can be reached at , ext , primebrokerageservices@tdameritrade.com or fax IX: Prime Brokerage Prime Brokerage (PB) trades are permitted for equities or bonds, can be done as block trades, and usually settle over DTC. Each client account must have at least $100K in equity. The enrollment forms are available on Veo. Prime Brokerage Services Agreement (Investment Manager or Advisor) Prime Brokerage Services Agreement Amendment (Client facing) Prime Brokerage Account Request) Prime Brokerage Delivery Instructions TD Ameritrade Institutional will prepare the necessary Form 1 Schedule A and fax it to the executing broker's clearing agent. It s then up to your executing broker or their clearing agent to sign off on it and return it to us for each separate relationship. Prime Brokerage Trade Worksheet (note -trade details can be submitted to TD Ameritrade in 4 ways; fax, , Veo and Veo upload Accounts are subject to a Prime Broker fee of $25 for each submission. The TD Ameritrade Institutional PB Service Team can be reached at , ext , primebrokerageservices@tdameritrade.com or fax

7 X: Options Trading Approval for options trading is required at the rep code level. IMs will need to complete TDAI 3169, Investment Manager Application and Account Agreement for Options Trading. IMs will not be required to complete the Advisor Option or Client Option Applications these are the responsibility of the RIA. XI: Error Resolution TD Ameritrade Institutional has a resolution process in place to handle trade errors and disputes. You should contact the trade desk at , option 1 as soon as possible after an error or dispute is discovered. The appropriate corrective action must be taken immediately to limit any possible open liabilities. Disputes will be handled on a case by case basis. TD Ameritrade Institutional has a team that handles errors/covering trades. If you want to cover the error right away, you may do so. If you want to see if TD Ameritrade Institutional can bust a trade, you will have to call in. If you make an error and cover it yourself, we still need instructions in writing (by fax) to move the trades in question to the appropriate error account. XII: Fee Disbursement Depending on how your investment management agreement is structured with the RIA, you may have the ability to deduct your investment management fees directly from Veo. Client authorization is required for your fee deduction and is built into the Third Party Investment Management Application (TPIMA) the client signs to gain access to SAE. The client will need to initial the appropriate section of the TPIMA to grant you this authority. If you have a question regarding how to deduct your investment management fee from Veo, please contact TD Ameritrade Institutional Tech Services at , option 3. XIII: Portfolio Downloads When you want to start producing files so you can reconcile your accounts, you will need to contact TD Ameritrade Institutional Technical Services at , option 3. TD Ameritrade Institutional can produce files that are compatible with the following portfolio accounting formats: Portfolio Center Captools dbcams. TD Ameritrade Institutional can also produce a generic file that is compatible with the following systems: Adhesion Technologies Advisor Assistant Albridge Fiserv Assetbook BridgePortfolio Black Diamond InData Infovisa Investigo Investment Scorecard Money Tree Software Morningstar Orion Advisor Services 5

8 Bull Run Portfolio Director Datamax PortfolioMinder E.Web Portfolio PowerAdvisor Electra Information Systems ProTracker Etelligent Q4i EZ Data Simple Track FIN SunGard Charlotte Fund Manager SunGard Trustware Series 7 IAS We also provide data support for Advent (including ACD) and Fiserv users. NOTE TD Ameritrade Institutional cannot create PMS files for past dates. If you need PMS file downloads, you must notify TD Ameritrade Institutional Tech Services as soon as accounts are opened for you to manage. Also, Advent files are not downloaded from Veo. Standard users should contact Advent directly. Term or Breu users may contact TD Ameritrade Institutional Tech Services. If you would like your client data released to a third party vendor we require a Release of Information form signed by the supervisory principal who oversees the accounts. Our ROI form can be obtained by contacting our Technology Services Department at Option 3 XIV: Important Contacts Role Managed Account Solutions Team Managed Account Solutions Service Team Trading Telephone managedaccountsolutions@tdameritrade.com , option 2, or InstServ-MAP@tdameritrade.com , option 1 Tech Services , option 3 Sales Prime Brokerage, Trade Away, and Step Outs , option 3 or institutionalsales@tdameritrade.com x or primebrokerageservices@tdameritrade.com Fax: FIX Product Manager:

9 FAQ Does TD Ameritrade Institutional need to know my proxy and reorg info even if I m not on the SAE roster? Yes. This information should be shared with the Managed Accounts Service team at instservmap@tdameritrade.com, How will IMs be notified of new accounts, and deposit and withdrawal requests? The RIA acting as the primary advisor is responsible for notifying IMs of any such requests as well as new accounts. However, we strongly recommend that IMs enable reports and alerts on Veo. How are management fees processed? The RIA and the IM both have the ability to process management fees independently, and this may be completed on Veo. How are trading fees assessed? Trading fees are assessed based on the RIA s (the primary advisor s) rates. What are the submission instructions? See Veo for an on-demand training module. Can an RIA continue to trade client accounts for which an IM has trading authority? No. Once an IM is granted trading authority for an account, the RIA must cease exercising their own trading authority for the duration of the relationship. RIAs must also provide IMs with advance notice of disbursements or withdrawals from these accounts if the IM requires it. Access to Separate Account Exchange is provided solely as a service to financial advisors using the brokerage, execution, and custody services of TD Ameritrade Institutional. TD Ameritrade does not guarantee nor is it responsible for the quality or accuracy of any third party's product or service. In no instance should the listing of a third party be construed as a recommendation or endorsement by TD Ameritrade. Furthermore, TD Ameritrade does not recommend or endorse any security described by any third party and the use of the TD Ameritrade logo does not represent the endorsement or recommendation of any third party. TD Ameritrade disclaims any loss or liability that is incurred as a consequence, directly or indirectly, from the use or application of this service. TD Ameritrade Institutional, Division of TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. 7

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