23rd May 2008
APCIMS welcomes golden opportunity to improve fund administration
The Association of Private Client Investment Managers & Stockbrokers (APCIMS) has today urged all participants in the funds industry to support proposals to automate the processing of investment funds.
Responding to the joint Euroclear UK & Ireland (EUI) and EMXCo consultation paper, “Cash PLUS: settlement of EMX orders in the CREST system”, APCIMS called on product providers and Third Party Administrators (TPAs) to support the initiative. David Bennett, Chief Executive of APCIMS, said:
“The inefficiencies associated with the administration of funds remain a major cost and burden not only on private client firms but also on the funds industry. Currently processing a fund transaction can cost up to three times more than an individual equity transaction.
The EUI/EMXCo initiative provides the industry with a golden opportunity to improve the settlement and reconciliation of unit trust holdings. If the funds industry embraces automation individual investors should automatically receive sale proceeds in 4 working days (which could be up to 8 working days faster than under the current system). APCIMS member firms fully support this work and we very much hope that fund managers and Third Party Administrators will do likewise.”
APCIMS and some of its member firms together with product providers and TPAs have all been involved in the EUI/EMXCo Funds Liaison Group which has developed these proposals over the last 12 months. They are set to go live in June 2009.
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Notes to the editor:
Euroclear UK & Ireland
Euroclear UK & Ireland (EUI) is the Central Securities Depository (CSD) providing settlement and related services for the United Kingdom, Ireland, the Channel Islands and Isle of Man using the CREST system. Previously CRESTCo, it was acquired by Euroclear in September 2002.
EMXCo
EMXCo launched the EMX message system in 2000 to provide both product providers and distributors (including APCIMS member firms) the facility to purchase and redeem investment funds electronically.
In January 2007 EMXCo became part of the Euroclear group.
Funds Liaison Group
In April 2007, Euroclear and EMXCo formed the Funds Liaison Group to provide a forum for market consultation on future order-routing and settlement solutions for UK investment funds. The Group includes representatives from fund managers, retail stockbrokers, third party administrators, fund platforms and industry trade associations. It meets roughly three times a year.
Cash PLUS: Settlement of EMX orders in the CREST system
In June 2008 EUI will launch “Euroclear Cash Settlement for Funds”, which will allow members of CREST to settle the cash element of fund transactions placed via EMX. The current consultation (“Cash PLUS: Settlement of EMX orders in the CREST system”) will facilitate both settlement of the cash element as well as a secure and efficient record of the movement of units. Reconciliation will also become as standardised and efficient as it is for equity transactions. There is currently no universal standard settlement period within the UK investment fund market and the consultation proposes that T+4 becomes the standard settlement period for both purchases and redemptions.
Once agreed, the proposals set out in the consultation paper are due to be implemented in June 2009.
APCIMS
APCIMS, the Association of Private Client Investment Managers and Stockbrokers, represents the interests of the vast majority of private client stockbrokers and wealth managers in the UK, and through them more than 10 million individual shareholders.
A copy of APCIMS response to the EUI/EMXCo consultation paper can be found at www.apcims.co.uk/public/publications/default.asp
For further information please call:
Dirk Paterson,
Head of Communications, APCIMS
on 020 7247 7080
Mobile: 07507 855 428;
Email: dirkp@apcims.co.uk
Andy Thompson,
Head of Operations, APCIMS
On 020 7247 7080
Mobile : 07714 215136 ;
Email : andyt@apcims.co.uk