Guide to Tailored Shareholder Reports: The Three R’s

Review your existing process.

As a first step: Review existing process. This will help you lay the foundation for determining what needs to change to comply with the Tailored Shareholder Reports rule. Examine specific aspects of your process:

• Assess existing data sources: Where is the content coming from? Can existing source files be used or do they need to be modified for easier extraction?
• Evaluate current workflow and timelines: When is the content available and where is it going?
• Review roles and responsibilities: Where are the intersections and handoffs?

Reorganize your process.

Reorganizing your process may seem daunting at first. But remember that it’s likely simpler than it may seem. All of the data in the Tailored Shareholder Reports currently exists somewhere in the fund’s shareholder reports, it just needs to be rerouted to more refined documents, and then broken out by class.

To reorganize your process, consider taking these steps, building on your existing process outlined in Step 1:

• Data sources: Now that you know where it comes from, when it’s available, and where it goes, make sure whoever prepares those sources is ready to break them out on a class level, and then reroute them for Tailored Shareholder Reporting purposes.
• Workflow and timelines: Adjust what you reviewed above to accommodate a larger volume of documents and data. This may mean more time, and/or it may mean more resources. Consider factors such as:
  • How are you organizing document management internally and with other parties?
  • How are you ensuring consistency of any data shared between the financial statements and the Tailored Shareholder Reports?
  • Where can you create efficiencies and/or incorporate automation into the process to help offset the change in workload?

Reorganizing your process—and testing out that new process—will be absolutely critical to help identify any hiccups and troubleshoot them before you are required to file.

Determine your Resources.

There are many factors to consider in determining resources and cost. We encourage asset managers to look at each phase of the process and determine where the expertise lies. For example, asset managers may want to consider:

• Content sourcing: Who is providing the content?
• Content processing: Who is managing the technical processing of this information?
• Delivery (web, print, and filing): Evaluate whether your process requires a significant amount of manual intervention, which can significantly drive up costs.

Notably: Where does expertise lie? Are you asking a fund accountant to manage the import of data, for instance? Or a lawyer to handle typesetting? If so, you may want to explore automation. Automation can help optimize efficiency, reduce costs, and improve the accuracy of documents.