Broadridge Brings Solution for SEC Rule 30e-3 Implementation



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Broadridge Financial Solutions, Inc. BR yesterday unveiled a solution to help fund companies and broker-dealers effectively implement the Securities and Exchange Commission (SEC) Rule 30e-3 and cut down report delivery costs.

SEC Rule 30e-3 will enable fund companies to avoid mailing their reports and other materials and instead, make them available in the Internet. Companies will be allowed to mail notices to shareholders regarding this internet availability and add important information from reports in the notice.

The SEC estimates that more than $230 million of cost savings on paper, printing and postage can be achieved by using the new delivery option that will be made available to fund companies starting Jan 1, 2021, provided they inform shareholders about their intention to switch to the process beginning Jan 1, 2019.

To Help Manage Delivery Preferences

Broadridge is launching a centralized website, www.FundReports.com on Jan 1, 2019 aimed at enabling firms manage their shareholder report delivery preferences during the two year notification period. It will enable shareholders to effortlessly enroll in electronic delivery, thus allowing fund companies to save costs of mailing the new notice. Shareholders can have access to this website through unique identification numbers attached to their accounts.

According to Michael Liberatore, head of Broadridge’s Mutual Funds and Retirement Solutions business, “Broadridge is actively working with funds and broker-dealers to ensure readiness, and our role at the center of the industry is enabling a very efficient and consistent approach for firms implementing the notice delivery method.”

So far this year, shares of Broadridge have gained 9.2%, outperforming the 6.7% rise of the industry it belongs to.

Our Take

The new offering is expected to benefit Broadridge’s Investor Communication Solutions segment which engages in processing and distribution of proxy materials to investors in equity securities and mutual funds.

The segment performed well in the last reported quarter with revenues increasing 5% year over year to $766 million.

Zacks Rank & Stocks to Consider

Currently, Broadridge is a Zacks Rank #3 (Hold) stock. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Some better-ranked stocks in the broader Zacks Business Services sector are The Interpublic Group of Companies, Inc. IPG , Automatic Data Processing Inc. ADP and WEX Inc. WEX , each carrying a Zacks Rank #2.

Long-term expected EPS (three to five years) growth rates for Interpublic, Automatic Data Processing and WEX are 7.4%, 12.5% and 15%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.










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