System and method for managing fractional shares of exchange traded funds in retirement plans

A system for processing a plurality of orders, each order specifying a portion, less than all, of a share of at least one of a plurality of exchange traded funds to be traded, the orders being received for each of a plurality of retirement plans, the system comprising:

• at least one processor;
• at least one memory coupled to the at least one processor, wherein the memory includes instructions that when executed by the at least one processor cause the system to perform,
• providing a pool of at least one share of each of the plurality of exchange traded funds to be traded by the plurality of retirement plans, the pool being held by a trust for the plurality of retirement plans;
• receiving, from a first of the plurality of retirement plans, a first order of the plurality of orders, the first order specifying a first amount that is other than a whole number of shares of a first of the plurality of exchange traded funds;
• identifying a second amount that is a whole number of shares nearest to the first amount that complies with an identification rule defining that the second amount is to be a next whole number higher than the first amount;
• adding, from the pool, a number of shares to the first amount such that a sum of the number of shares and the first amount equals the second amount;
• directing an exchange to execute, before an end of a trading day, at least one trade of the first of the plurality of exchange traded funds for the second amount, higher than the first amount, the second amount including a first portion of a share corresponding to the pool;
• allocating the first amount to the first of the plurality of retirement plans;
• allocating a difference between the first amount and second amount to the pool;
• monitoring a number of shares of each of the exchange traded funds in the pool;
• determining a first set of exchange traded funds, the first set of exchange traded funds being exchange traded funds in the pool outside of a first threshold;
• determining a second set of exchange traded funds, the second set of exchange traded funds being exchange traded funds in the pool outside of a second threshold, the second threshold being greater than the first threshold;
• generating a report including the second set of exchange traded funds;
• automatically adjusting the number of shares of each of the exchange traded funds of the first set of exchange traded funds to be within the first threshold;
• and
• automatically adjusting one or more of the first threshold or the second threshold based on the first set of exchange traded funds and the second set of exchange traded funds.

A non-transitory computer readable medium having computer readable program code embodied therein for processing a plurality of orders, each order specifying a portion, less than all, of a share of at least one of a plurality of exchange traded funds to be traded, the orders being received for each of a plurality of retirement plans, the computer readable program code configured to cause a computer system to perform:

• providing a pool of at least one share of each of the plurality of exchange traded funds to be traded by the plurality of retirement plans, the pool being held by a trust for the plurality of retirement plans;
• receiving, from a first of the plurality of retirement plans, a first order of the plurality of orders, the first order specifying a first amount that is other than a whole number of shares of a first of the plurality of exchange traded funds;
• identifying, by a hardware processor coupled to a memory, a second amount that is a whole number of shares nearest to the first amount that complies with an identification rule defining that the second amount is to be a next whole number higher than the first amount;
• adding, from the pool, a number of shares to the first amount such that a sum of the number of shares and the first amount equals-the second amount;
• directing an exchange to execute, before an end of a trading day, at least one trade of the first of the plurality of exchange traded funds for the second amount higher than the first amount, the second amount including a first portion of a share corresponding to the pool;
• and
• allocating the first amount to the first of the plurality of retirement plans;
• allocating a difference between the first amount and the second amount to the pool;
• monitoring a number of shares of each of the exchange traded funds in the pool;
• determining a first set of exchange traded funds, the first set of exchange traded funds being exchange traded funds in the pool outside of a first threshold;
• determining a second set of exchange traded funds, the second set of exchange traded funds being exchange traded funds in the pool outside of a second threshold, the second threshold being greater than the first threshold;
• generating a report including the second set of exchange traded funds;
• automatically adjusting the number of shares of each of the exchange traded funds of the first set of exchange traded funds to be within the first threshold;
• and
• automatically adjusting one or more of the first threshold or the second threshold based on the first set of exchange traded funds and the second set of exchange traded funds.