Celent Study Identifies Ongoing Challenges with Cost Basis Reporting Compliance Ahead of Phase III

Scivantage recently partnered with Celent for a study examining the current state of the industry as it relates to cost basis reporting (CBR) readiness.  Celent conducted close to 50 interviews with broker-dealers, mutual funds, transfer agents, custodians, prime brokers, and technology providers to understand the full spectrum of CBR regulation implications. The resulting research titled, “Cost Basis Reporting Landscape 2012,” provides an analysis on firms’ evolving cost basis reporting priorities for technology capabilities and operational processes, and how these have changed after the first two (of three) phases of regulations have been completed.

According to the report, while CBR systems are still viewed primarily as a compliance requirement, firms are exploring ways to use them to streamline processes, integrate technologies and improve communications between end-users, financial intermediaries and solution providers.

Additional key report insights include:

  • – The majority of the firms across all segments chose to buy versus build a CBR solution
  • – Firms using third-party vendors where overall more satisfied than those who were using a homegrown solution, with custodians being the most satisfied segment on average (3.75)
  • – Compatibility of the cost basis reporting system with existing technology ranked a high priority across all industry segments
  • – Brokers and prime brokers expressed the least confidence in their system to be able to handle 1099 reporting; while mutual funds, transfer agents and custodians have the least confidence for transfers processing

To download the full report, click here.

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