STANDARD OPERATING PROCEDURES

Transcription

1 STANDARD OPERATING PROCEDURES ACCOUNT ANALYSIS MODEL REBALANCES Received By Daily via custodial data feed 12:00 pm CST General Operating Standards Same Day 98% Same Day 98% Description Account (cash & security) Analysis: Cash and/or securities transactions that are received by Envestnet in the custodial data files from the previous business day for accounts that are above or below the model cash variance will be reviewed on a daily basis prior to 12:30 pm Central Standard Time at which time Envestnet shall rebalance on the same business day. - Low Cash Accounts: Accounts with cash that is equal to or below 0.5%; additional funds may be raised to bring cash allocation back to target. - Excess Cash Drift Exceptions: Accounts with a cash drift that is 3% (Standard) or more above the model cash target are reviewed. (Sample Cash target = 2%, High Cash at 5%). Excess funds are invested to model. - Not In Model Positions: Accounts with securities that are not part of the current model allocation are liquidated and proceeds are brought into the model. - Account Activity: If the cash deposit or raise cash amount is more than 15% of the account s market value for Fund Strategist Portfolios and mutual funds, a true rebalance operation (buys and sells) will occur. If the cash deposit or raise cash amount is more than 35% of the account s market value for Separate Managed Accounts (SMA), Multi-Manager Accounts (MMA) and Unified Managed Accounts, a true rebalance operation (buys and sells) will occur. For model updates or changes submitted by the Model Provider to Envestnet prior to 12:00 p.m. Central Standard Time, Envestnet shall rebalance on the same business day. Fulfillment of rebalancing instructions could span multiple days depending on liquidity constraints, trade volume, number of accounts in model or unusual market conditions. Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 1 If any item is deemed Not in Good Order (NIGO) the will not apply.

2 Description Trade Error **2 business days to draft an "as-of" analysis 1. Upon notification by BD or upon discovery by Envestnet of any trade error or omission of a trade, Envestnet will place the affected account(s) on trade hold and report via to the Envestnet Trade Error team. 2. Upon notification by BD or upon discovery by Envestnet of any trade error or omission of a trade, Envestnet shall submit corrections or trades as soon as reasonably possible in order to reduce additional market risk caused by the error or omission. 3. **Once the risk has been eliminated, Envestnet will take 2 business days to draft an "as-of" analysis. Analysis will only be provided by ENV for trade errors that require as-of trading analysis, where evaluation of the client s best interest is analyzed. Analysis for all other trade corrections will not be provided. If Envestnet is responsible for the error, the corrections will be done in Envestnet s account. If Envestnet is not responsible for the error, the corrections will be done in a BD/Advisor error account depending on the firm who is at fault and mutual agreement between Envestnet and the firm found to be at fault. Envestnet will inform BD via of any delays beyond the 2nd business day after discovery of trade error. 4. Any subsequent trade corrections caused by Envestnet, due to error in analysis or trade correction instructions provided to BD must be corrected within 2 business days of being reported to, or discovered by Envestnet. Account Reconciliation Daily account reconciliation and refreshed account data for standard custodians Reconciliation of account detail from data aggregation providers (DST, DTCC, DAZL & ByAllAccounts) Complete reconciliation on of the accounts and provide updated account data on the platforms by 8:00am CST daily following receipt of the daily transmissions from the custodians by 12am CST. All transactions received from the data provider after 12 AM CT will be posted next day. On a daily basis, Envestnet reconciles data on the platform with the daily account files sent by the custodians after trading hours. These files include but are not limited to, name and address, daily bookkeeping, positions, balances, and security master files. In all cases, Envestnet will notify appropriate support areas via if of account reconciliation has not been completed by 8:00am CST, with an estimated time of completion. Envestnet will exceed 8:30am CST for completion, no more than once a month on average, reviewed quarterly. Availability of Current Data. Unlike data delivered from custodians, aggregation data is gathered on a best efforts basis, and is subject to the content provider (e.g. insurance carrier, annuity firm, fund family, etc.) providing their information in a timely and complete manner. Neither Envestnet nor the data aggregation provider can insure that transaction and position detail is current. For this reason, valuations should not be considered trade ready quality. For DST, a month-end position file will be required to fully reconcile transactions to positions, and may delay seeing new account detail on the Platform until a week or two after month-end. For ByAllAccounts, the ability for the data provider to obtain current information may be delayed due to technical changes in how this data is being gathered. For these reasons, reconciliation of aggregation accounts is limited to what data is made available to Envestnet in the daily feed from the data aggregation providers. Incomplete data and delays are common. As such, meeting the reconciliation SLA above does not guarantee that all account data will be current, as of T+2, but rather that all data received will be posted within this time frame. Outages. If requested, Envestnet can communicate unresolved outages to the home office by the third business day. When an account is not reconciled, a disclosure to the Advisor will appear on the platform both at the Client Overview and specific Account Overview. If the client group is suppressed from being published entirely, the dates listed for reporting will be as of the last publish date. Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 2 If any item is deemed Not in Good Order (NIGO) the will not apply.

3 Footnotes: Transactions are received throughout the day for Data Aggregation accounts. All transactions received from the data provider after 12 AM CT will be posted next day. Accounts will only be reconciled when providers send position files. Due to the timing of receipt of files, data should not be considered for trading. Also, on any account where valuation and positions have not been completely reconciled with the custodial data, trades should not be accepted on the platform until reconciliation is complete. Any reconciliation delays may result in delayed task processing. It is important that the BD home office check the normal daily queues. Accounts are published to the platform within client groups. If one account is not reconciled the full client group will not be published. Additional Details QPR Production Download availability for QPR statements 98% by 15th bus day of the month Performance team will monitor the service requests and will escalate data issues associated with the QPR or when end users call with service issues past the agreed on SLAs. Footnotes: Notwithstanding the foregoing, the QPR availability may take more than the allotted service level period to implement and, therefore, the SLA does not apply to QPR availability that includes the following: Invalid data from custodian. Advisor/back office updates to addresses, configuration (brand values), benchmarks, reporting groups, etc. made after the quarter ends. Missing 3rd party feeds. Market commentary that is not delivered to Envestnet by the third business day following the end of the quarter. Accounts missing fee schedule. Accounts opened with market value on the start date. Account with market value of zero. Billing 10 th business day after quarter end 98% Accuracy Additional Details ENV calculates fees and then transmits a billing file to the firm containing account level billing data in order for fees to be automatically deducted from the accounts by the custodian. This will be done by the 10 th business day after quarter end. If ENV encounters any transmission or upload delays, ENV will escalate the issue to the firm immediately. ENV and the firm will work to eliminate the problems preventing a successful transmission of fees. Once problems have been resolved, fees will be transmitted to the custodian. Billing Activity Report: ENV calculates the fees for the accounts and uploads complete account level billing data onto the platform. Billing Activity for the current billing cycle shall be viewable on the platform for 98% of accounts on the business day following the billing transmission and uploads, respectively. It is expected that total client fees as well as the components of the client fee will be accurate on 98% of the accounts in the quarterly on-cycle and monthly off-cycle billing. Upon notification or discovery of fee calculation and other errors including but not limited to posting to incorrect accounts, ENV shall correct those errors and transmit a new fee file to the firm within 4 business days of discovery. ENV will notify the firm immediately upon discovery of a fee calculation or billing errors and provided expected turnaround time for resolution. Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 3 If any item is deemed Not in Good Order (NIGO) the will not apply.

4 Request Operating Standards Request (SR)Type Firm Completed Tasks Envestnet Completed Tasks Firm Task Complete By ENV Task GENERAL SERVICE REQUEST OPEN REGISTRATION (FOR IN GOOD ORDER PAPERWORK) Enter General Request 12:00 pm CST Promote to IGO Upload SIS Add Account Monitor Funding Respond to GSR 12:00 pm CST Invest RAISE CASH Submit SR 12:00 pm CST Raise Cash SETUP SW Submit SR RE-REGISTRATION SIS (ASSUMES MULTIPLE ACCOUNTS) Upload SIS Add Account Monitor Funding Standard is 15 days prior to the specified day by 12:00 pm CST 12:00 pm CST Execute Request Start process with copy account Same Day Same Day without master account, Envestnet traded 2 business days without master account, 7 business days with master account Same Day, Envestnet traded 3 business days if 2 business days later than creation the date Same Day Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 4 If any item is deemed Not in Good Order (NIGO) the will not apply.

5 Request Operating Standards Cont Request (SR)Type Firm Completed Tasks Envestnet Completed Tasks Firm Task Complete By ENV Task REBALANCE REGISTRATION Submit SR 12:00 pm CST Begin Trade Process Same Day- Envestnet traded 3 business days INVEST CONTRIBUTION Journal In Task completed and assets/cash viewable on the platform 12:00pm CST Invest Same Day Envestnet Traded 3 business days HARVEST GAIN/LOSS Submit SR 12:00 pm CST Trade 7 business days CHANGE SIS Upload SIS Monitor Contribution, if applicable Add Account, if applicable Complete & Confirm Journal 12:00 pm CST APL Set Up/Close Invest TERMINATE W/ LIQUIDATION Submit SR 12:00 pm CST Liquidation TERMINATE W/ IN-KIND TRANSFER Account number change (if Required) - 2 business days plus 1 day to invest 7 business days, Same Day Envestnet Traded 3 business days Externally Traded Submit SR 12:00 pm CST Close Account 2 business days Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 5 If any item is deemed Not in Good Order (NIGO) the will not apply.

6 DISCLOSURE This document is designed for Home Office and Advisor Use Only. The services and materials described herein are provided on an as is and as available basis, with all faults. Envestnet disclaims all warranties, express or implied, including, without limitation, warranties of merchantability or fitness for a particular purpose, title, non-infringement or compatibility. Envestnet makes no representation or warranties that access to and use of the internet while utilizing the services as described herein will be uninterrupted or error-free, or free of viruses, unauthorized code or other harmful components. Envestnet reserves the right to add to, change, or eliminate any of the services and/or service levels listed herein without prior notice to the advisor or the advisor s home office. Advisor/Professional Use Only and is not for public distribution. Trading Fixed Income securities may take more than the allotted service level period to implement and, therefore, the s do not apply to a SR that includes Fixed Income securities and/or 6 If any item is deemed Not in Good Order (NIGO) the will not apply.