Broadridge and Scivantage Join Forces for Cost Basis Reporting

Broadridge Financial Solutions today announced a strategic partnership with Scivantage, the financial technology provider of cost basis applications, to provide cost basis solutions to Broadridge clients. Under the new partnership, the two companies will collaborate on other distribution opportunities for Broadridge solutions such as business process outsourcing, reconciliations, and performance reporting.

Scivantage's Maxit platform will be integrated with Broadridge's processing engine and hosted in Broadridge’s data centers to provide investment firms with security, redundancy and scalability. Under the deal, a team of Broadridge associates will join Scivantage "to ensure a smooth client transition and seamless ongoing support," according to a press statement.

Last week Wall Street & Technology spoke with Susan Certoma, president of brokerage processing services for Broadridge, and Adnane Charchour, president and CEO of Scivantage, about their new partnership, what the firms offer and what clients want in this post-Dodd-Frank age.

What are the challenges in cost basis reporting in this post-transparency world?

Susan Certoma, Broadridge: One of the challenges around cost basis reporting is the new regulations that have been happening over the past few years. The complexity of those regulations continue to increase so it becomes much more difficult to ensure that you’re addressing all of these reporting requirements. That’s the great opportunity for us because people are looking for a strong partner to work with.

We did a survey with IBM of more than 130 operational executives and we asked them what is driving their decisions and 77 percent said regulatory requirements were really the main external driver triggering change for them. And we found that cost basis reporting as one of the largest challenges for these firms.

Adnane Charchour, Scivantage: These regulations require a lot of system-wide changes and this one is a big challenge. So much so that regulators have extended the deadline by one year -- they had pushed it to this coming year as opposed to the current year we’re in because of how big the implementation was for the industry as a whole. These compliance initiatives put other projects on the backburner because you have to meet the deadlines.

How are firms dealing with this challenge? Do they build their own cost basis reporting solutions or are they willing to trust third-party solution providers?

Certoma: Several years ago, more people were developing their own in-house solutions, but as the regulatory environment became more onerous, this became more complex. We’ve seen the trend of many financial firms looking to us and Scivantage to outsource to and take over this regulatory burden. It requires a large investment and deep expertise. Also, this is something they have to comply with but it is not something that is driving their revenues. We are seeing the trend of firms looking for leading partners to take over the regulatory end of their business.

Is this offering being used by a client right now? Can you describe them and how it's being used?

Certoma: We have clients on our processing platform who are also clients of Scivantage. We just closed this deal and the specifics around this deal. The Maxit platform is already in production and being used in the financial industry.

Charchour: The Maxit solution was launched six years ago and we have leading clients in the financial industry who are relying on it. As far as the specific transaction, we looked to partner with Broadridge to take their processing service and extend that service to clients of the Maxit platform.

Can you name these clients?

Charchour: We can say that it’s being used by the Number 1 asset management company in the country and the top brokerage and prime brokerage firms today.

For more information, check out the official announcement at the Scivantage and Broadridge web sites.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio