Panel Discussion - Exploring a New Era: Shareholder Authentication and Alternatives to Medallion Signature Guarantees Moderator: Sandy Morris, American Century Investments Panelists: Carrie Caruther, Priority Investors; Joya Favors, Northern Trust; Jay Sterling, Thrivent Financial

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NICSA – Midwest Regional Meeting
Panel Discussion - Exploring a New Era: Shareholder Authentication and
Alternatives to Medallion Signature Guarantees
September 22, 2015

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Jay Sterling, Manager & Assistant
Operations Officer
Jay is a Manager and Assistant Operations Officer for The Thrivent Mutual Funds
Transfer Agent.
His primary focus is on regulatory support and oversight for all Mutual Fund
operational functions.
Jay has 17 years of experience in the mutual fund transfer agent industry within 3
Midwest based companies.
He has served and participated on several industry steering committees including the
ICI Transfer Agent Advisory Committee as well as the Regulatory Compliance Advisory
Group with DST Inc.

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Carrie Caruthers, Risk & Fraud
Control Manager
Carrie just took over the role of Risk & Fraud Control Manager at American Century
Investments.
She has more than 16 years' experience working with direct clients and supporting
their investment goals. Carrie holds FINRA 6, 7, 63, 24 & 26 licenses.
Previously, Carrie was the Business Manager, Priority Investors, for American Century
Investments, overseeing the complex needs of brokerage and retail services, principle
oversight and Priority Program manager of the team dedicated to supporting high net
worth clients.
Carrie has worked closely with business partners in Legal, Risk & Fraud and Workforce
Operations to safeguard a client's financial interests by strengthening the overall
experience through increased authentication options with direct and indirect
interactions.

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Joya Favors, Vice President &
Control Manager
Joya Favors is a Vice President and Control Manager for Northern Trust Company. In
her role, Joya collaborates closely with the Transfer Agency management to ensure a
proactive focus on controls, works closely with internal and external audit partners,
and acts as a subject matter expert in Transfer Agency controls.
Prior to joining the Control team in 2012, Joya managed the Operations team for
Northern Trust’s North American Transfer Agency from 2007-2012. Joya also
represents Northern Trust as a NICSA Transfer Agency Committee Member.
Prior to joining Northern Trust in 2007, Joya served as a Transfer of Accounts Manager
at Mesirow Financial in Chicago. Previously, she worked as an ACATS Work Director at
Wells Fargo Investments in Minneapolis, MN.
She earned a Bachelor's degree in business and sociology from Fisk University in
Nashville, TN. She holds FINRA 7 and 63 licenses.

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Thrivent Mutual Funds
Business Model
• Fraternal benefits organization
− Member focused
• Captive sales force
– Approximately 2,500 Thrivent Financial
registered representatives
• Employees of the company
• Primarily a check and application shop
– 85% network level 0
– 10% omnibus
– 5% network level 3
• Cross product ownership
– High number of members own multiple
products
• Mutual Fund/Annuity/Life Insurance
Thrivent Financial Headquarters – Minneapolis, MN
Thrivent Financial Headquarters – Appleton, WI

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Thrivent Mutual Funds
Authentication Model
• Registered representatives
– Full name
– Registered representative #
– One of the following two
1. Member ID
2. Shareholder account #
• Shareholder
– Full name
– Two of the following three
1. DOB
2. Member ID
3. Shareholder account #

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Thrivent Mutual Funds Knowledge
Based Authentication
• When used?
– Enhanced security requested
– Failed primary authentication
• Contract with third party vendor
• Web based tool
– Enter shareholder information
– Series of questions
– Pass or fail?

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Thrivent Mutual Funds –
Signature Verifications
• MSG
• Notary Public
• Registered Representative
Attestation
– Notary or MSG is not an
absolute requirement
– Registered representative is
attesting that the identity has
been verified
– Registered representative
accepts liability

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American Century Investments
A Foundation for Success
• Founded in 1958 by James E. Stowers, Jr.
• Today we are one of the largest private
money managers in the U.S.
– More than $140billion* in total assets.
• Focused on superior investment
performance through active team-based
investment management.
• Mutual funds and investment management
expertise distributed through Intermediary,
Institutional, International and Individual
channels.
• Headquartered in Kansas City with offices
in Mountain View, CA; New York; London;
and Hong Kong.
* As of 9/8/2015
American Century Investments Headquarters

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Stowers Institute for Medical
Research - A Hope for Life
• Founded by Jim and Virginia Stowers in 1994
to benefit humankind through research on
genetic-based diseases, including cancer.
• One of the largest endowments in the world
among private basic biomedical research
institutions.
• Home to 21 independent research programs,
three technology development programs and
more than 350 scientists.
• Through our ownership structure, more than
40% of American Century’s profits have been
distributed to the Institute in support of
research to help cure genetically-based
diseases including cancer, diabetes and
dementia.
The Stowers Institute for Medical Research

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Shareholder Authentication –
Current State
• Standard Client Verification
– Identification and Verification (ID&V)
– Phone Verification with representative
• Online Authentication
– User name/password
– Challenge question
– One Time Security Code (OTSC)
• Exception Request Review
– Reimbursement / cost exceptions
– Policy / risk exceptions
– Graduated approval requirements
– Senior leadership visibility for larger financial risk requests
– Documentation / audit trail
• Additional Verification
– Additional level of security
– High risk transactions
– Information given
– Out of wallet questions

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Shareholder Authentication –
Future State
• Voice Bio-Metrics
– High cost product
– Enrollment process
– Additional resources to analyze participants and process
• Phone-Print Verification
– Analyzes phone numbers
– Call audio recognition
– Voice bio-metric options
• Critical Notification
– Enrollment process
– Text message
– Automated voice

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Shareholder Authentication
Northern Trust’s Global Fund
Services
Prepared for NICSA Midwest Meeting
September, 2015
Joya Favors, Vice President

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A Unique Business Focus
Northern Trust is a market leader in asset servicing and asset management solutions for
institutions and private clients around the globe.
Who we are
• A provider of fund administration, global custody, asset management,
wealth management, banking and personal fiduciary services.
• Clients in approximately 46 countries; Services in over 100 markets
• Worldwide staff: 15,000+
Global Fund Services
• Focus on investment managers and fund companies
• Global Transfer Agency Locations: Chicago, London, Dublin, Limerick, Guernsey,
Luxembourg, Bangalore
• North America Transfer Agency Clients: 95 (as of June 30, 2015)
North America Transfer Agency
Vehicles Supported
 Mutual funds
 LPs & LLCs
 Common & collective funds
 Alternative funds and funds-of-funds
North America Transfer Agency
Services Supported
 Client Servicing
 Investor Servicing
 Intermediary Servicing

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Shareholder Authentication
Types of Funds Transfers Requiring Authentication
Authentication Methods
• Security Questions
• PIN/Password
• Medallion Signature Guarantee
• Callback
Cash Movement Non-Repetitive Maintenance Requests*
• Wire Transactions - Out
• Internal Transfers – between client’s
accounts/legal entities
• Outgoing check/ACH
• Direct Funds to Client
• Fee Payments
• Repetitive Transactions
• Standing Instructions
• Protected profiles
*For new or changes to existing
Callback
PIN/Password
Medallion
Signature
Guarantee
Security
Questions

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Shareholder Authentication: Industry Challenges
Industry challenges facing shareholder authentication
Some firms will not stamp a free form letter
Some firms will only prove a stamp if investor is one
of their clients
Some firms are only providing stamp for transfer of
securities
Prospectus contains a stamp requirement for
transactions that are not a transfer of securities
Maintenance and Transaction Forms
Alternative Ways to Request Transactions
Signature Validation Program (SVP)*
Alternative Verification Process - Callback
Possible Resolutions
Investors Obtaining a
Signature Guarantee
Stamp
*Designed for non-securities commercial transactions

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