Peeking Under the TARP: Implications of Cost Basis Reporting for Brokers and

Peeking Under the TARP: Implications of Cost Basis Reporting for Brokers and Investment Managers

Product Type: Market Research Report
Published by: TowerGroup
Published: December 2008
Product Code: R301-1574

Description

The Troubled Assets Relief Program, signed into law in October 2008, includes a provision requiring broker-dealers and investment managers to track and report the cost basis of individual customers' securities.

Handling complex transactions such as wash sales and processing corporate actions automatically are some of the more pressing challenges financial services institutions must tackle.

Many cost basis systems do not track every cost basis method or allow customers to choose a method; retail brokers must act immediately to update these systems if they are to meet TARP's implementation deadlines.

The need to integrate cost basis solutions with existing systems such as trading interfaces and IRS Form 1099 tax reporting systems adds to the technology challenges.

TowerGroup expects two types of firms to emerge: those that simply comply with the legislation and those that look to gain a competitive advantage by using cost basis data to build tax management functionality.

Table of Contents

Report Coverage
Cost Basis Defined: Exhibit 1
Cost Basis Currently a Value-Added Service
Background and Highlights of the Cost Basis Legislation
Key Cost Basis Challenges for Brokers and Investment Managers: Exhibit 2; Exhibit 3
Cost Basis Reporting Enabling a Competitive Advantage: Exhibit 4
Summary

Ordering and More Information

Price and Delivery Options

MindBranch has been the leading provider of industry and investment research from more than 550 independent research firms since 1992. With over 90,000 market research reports, MindBranch is your trusted source of competitive business intelligence.