Northern Trust Partners with 3D to Support Asset Managers’ Fund Distribution Oversight

Northern Trust (Nasdaq: NTRS) has entered into an agreement with Distributor Due Diligence (3D) to support its asset manager clients with key elements of how they oversee distribution of their funds to investors. The service is named Network Monitor.

Under the agreement, Northern Trust will make 3D’s platform service available to clients to help them discharge their regulatory responsibilities for performing due diligence of their distributor networks.

By drawing on 3D’s platform and distributor coverage spanning more than 75 countries, clients can automate key aspects of distributor due diligence questionnaire processes. This supports asset managers’ focus on overseeing appointed intermediaries and complying with regulations.

Clive Bellows, head of Global Fund Services – Europe, Middle East and Africa, Northern Trust, says: "This solution deploys technology to help our clients reduce manual administration while evidencing the measures they have taken to meet required standards of due diligence. As regulators show heightened focus on asset managers’ control of cross-border distribution, Network Monitor helps drive efficiencies in how they can fulfil their responsibilities.”

Steve Bennett, co-founder of 3D, comments: "We are excited to be working with Northern Trust on Network Monitor. With our 3D platform, Northern Trust’s clients can evidence oversight and accountability for meeting their regulatory obligations, including those of MiFID II and AMLD 4 at the European level, and also the growing national regulatory requirements in major fund centres such as the UK, Ireland and Luxembourg.”

With European regulators increasingly focused on product governance and distributor oversight, the solution helps managers take action to meet their expectations and provide auditable records of doing so. In the United Kingdom, the Financial Conduct Authority (FCA) recently recommended managers collaborate more closely with distributors while better monitoring risk factors (according to FCA, MiFID II: product governance review, 26 Feb 2021).

The Central Bank of Ireland’s CP86 regulation also sets out requirements and responsibilities for oversight of distribution functions. Additionally, Luxembourg’s financial services regulator, the Commission de Surveillance du Secteur Financier, sets out in its Circular 18/698 that due diligence performed on delegates by asset managers should be evidenced and documented.

Northern Trust’s Global Fund Services provides fund administration, global custody, depositary, investment operations outsourcing and revenue enhancement solutions to global investment managers – supporting an extensive range of complex investment strategies across the full spectrum of asset classes.

About 3D Distributor Due Diligence

Distributor Due Diligence (3D) enable fund managers and intermediaries to conduct due diligence on the global distributors of their funds. 3D uses a standardised questionnaire including all major industry and regulatory standards. Our primary focus is to streamline the current process, strip out the duplication and automate the information gathering. This enables fund companies and intermediaries to complete the due diligence process quickly and to deploy their due diligence resources more efficiently and effectively. In addition, 3D’s clients can also choose a full ‘managed service’ for which 3D instruct a ‘Big Four’ accounting firm to conduct an initial review of distributor responses, saving yet time for fund managers. For more information, please see https://distributordd.com.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 22 U.S. states and Washington, D.C., and across 23 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of March 31, 2021, Northern Trust had assets under custody/administration of US$14.8 trillion, and assets under management of US$1.4 trillion. For more than 130 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Please visit our website or follow us on Twitter.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Please read our global and regulatory information.

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