Cost-Basis Burdens Looming
New reporting rules present operational, technology hurdles
Under the recently passed economic bailout bill, brokerages, mutual fund companies, issuers and their transfer agents will face new cost-basis reporting requirements that are likely to pose substantial administrative and technological challenges. Software and service providers are adapting quickly to the mandate, accommodating firms who have until 2011 before they must begin reporting customers' cost basis when selling certain products.
Depository Trust & Clearing Corp. (DTCC) last week said it has bolstered AccuBasis, an online cost-basis reporting service used by 35 brokers, banks, transfer agents and issuers including Aflac, Walt Disney Co., Johnson Controls and First American Stock Transfer. Last month, Eagle Investment Systems, a unit of Bank of New York Mellon Corp., announced that its investment accounting solution now supports the new reporting requirement, while Wolters Kluwer Financial Services has rolled out enhanced tax reporting functionality for short sales on its GainsKeeper platform.
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