System and method for centralized automated reconciliation of custody accounts

Abstract

A method and system for centralized automated reconciliation of investment manager and related custody accounts makes use of computer hardware and software in a service bureau environment to receive information and records electronically from fund managers and custodian banks in different formats, to reformat the files for inputting to the system, and to perform the reconciliation process in a uniform manner. The system also allows one or both of fund managers and custodians to establish matching rules, to view the results of the matching process, to track the investigation process for unmatched records, and to manually match unmatched records.

1 . A computer-implemented method for reconciliation of fund manager and custodian account records, comprising:
 validating, formatting and uploading to a database first and second account records received from a fund manager and a custodian respectively;   allowing the fund manager and the custodian to predefine matching rules for the respective first and second account records independently of one another;   comparing the first and second account records by a computer application according to the predefined matching rules; and   identifying by the computer application at least one of matched and unmatched first and second account records.   
     
     
         2 . The method of  claim 1 , wherein validating, formatting and uploading the first and second account records further comprises validating, formatting and uploading the first and second account records for one of a position and a transaction. 
     
     
         3 . The method of  claim 2 , wherein validating, formatting and uploading the first and second account records for the position further comprises validating, formatting and uploading the first and second account records for one of a securities position and a cash position. 
     
     
         4 . The method of  claim 2 , wherein validating, formatting and uploading the first and second account records for the transaction further comprises validating, formatting and uploading the first and second account records for one of a securities transaction and cash transaction. 
     
     
         5 . The method of  claim 1 , wherein validating, formatting and uploading the first and second account records further comprises receiving the first and second account records electronically from the fund manager and custodian respectively. 
     
     
         6 . The method of  claim 5 , wherein receiving the first and second account records electronically further comprises receiving the first account record electronically from an internal portfolio tracking system of the fund manager and receiving the second account record electronically from the custody network of the custodian 
     
     
         7 . The method of  claim 1 , validating, formatting and uploading the first and second account records further comprises validating, formatting and uploading the first and second account records received from the fund manager and the custodian respectively according to a predefined schedule. 
     
     
         8 . The method of  claim 1 , wherein allowing the fund manager and the custodian to predefine matching rules further comprises allowing the fund manager and the custodian to predefine available match groups for the respective first and second account records. 
     
     
         9 . The method of  claim 1 , wherein allowing the fund manager and the custodian to predefine matching rules further comprises further comprises allowing the fund manager and the custodian to predefine matching criteria in terms of a tolerance in at least one of percentage terms and nominal terms. 
     
     
         10 . The method of  claim 1 , wherein allowing the fund manager and the custodian to predefine matching rules further comprises allowing the fund manager and the custodian to predefine the matching rules in terms of levels of match success. 
     
     
         11 . The method of  claim 1 , wherein identifying at least one of matched and unmatched first and second account records further comprises allowing a manual match of the unmatched account records on the database by either one of the fund manager and the custodian if unmatched account records are identified in the comparison. 
     
     
         12 . The method of  claim 11 , wherein allowing a manual match of the unmatched account records further comprises generating a report of the comparison by the computer application identifying the unmatched account records accessible for display by the fund manager and the custodian if unmatched account records are identified in the comparison. 
     
     
         13 . The method of  claim 12 , wherein generating a report of the comparison by the computer application further comprises displaying the unmatched first and second account records simultaneously for either one of the fund manager and the custodian on a consolidated screen if unmatched account records are identified in the comparison. 
     
     
         14 . The method of  claim 13 , wherein displaying the unmatched first and second account records simultaneously further comprises prompting either one of the fund manager and the custodian for entry of the manual match. 
     
     
         15 . The method of  claim 11 , wherein allowing a manual match of the unmatched account records further comprises identifying a reason for the manual match. 
     
     
         16 . The method of  claim 15 , wherein identifying the reason for the manual match further comprises storing a record of the reason for the manual match. 
     
     
         17 . The method of  claim 16 , wherein storing the record of the reason for the manual match further comprises allowing a retrieval of the record of the reason for the manual match. 
     
     
         18 . A computer system for reconciliation of fund manager and custodian account records, comprising:
 a database adapted for uploading validated and formatted first and second account records received from a fund manager and a custodian respectively; and   a computer application preprogrammed for comparing the first and second account records according to matching rules, which matching rules the fund manager and the custodian are allowed to predefine for the respective first and second account records independently of one another, and to identify at least one of matched and unmatched first and second account records.   
     
     
         19 . A machine-readable medium on which is encoded program code for reconciliation of fund manager and custodian account records, the program code comprising instructions for:
 validating, formatting and uploading to a database first and second account records received from a fund manager and a custodian respectively;   allowing the fund manager and the custodian to predefine matching rules for the respective first and second account records independently of one another;   comparing the first and second account records by a computer application according to the predefined matching rules; and   identifying by the computer application at least one of matched and unmatched first and second account records.