Investment industry calls for input on funds market review

Stockmarket-Stock-Market-FTSE-Performance-700x450.jpgThe UK Fund Trading and Settlement project has called on the industry to provide information on how to improve trading in the fund market.

The initiative, announced two weeks ago, is a joint project between major investment firms and trade bodies, including the Investment Association, ABI, Tisa, Wealth Management Association and the UK Platform Group, looking at how the industry can improve the trading process of mutual funds worth around £874bn.

The project has now launched a request for information for firms to help identify ways in which the fund trading and settlement landscape could be transformed.

The group said since the project was announced there has already been “significant interest” from a broad range of firms in supporting the initiative, both in the UK and internationally.

The request for information document will run for four weeks and will contain input from the 20 firms involved in the project and external organisations.

The UK FTS, which also focuses on increasing automation, outlines the potential for an entirely new structure to replace the current system, including trading services, net settlement services, asset reconciliations, corporate actions, legal agreements and reporting services being executed in a systematic way.

Tisa deputy chair Charles McCready, who is programme director on the project, says: “There is a widespread view that the current infrastructure, which has evolved over many years, offers some big opportunities to cut increase efficiency, reduce costs and reduce risk, while also delivering a better consumer experience.

“There is a general consensus that more standardisation of fund trading plus the ability to integrate this with net settlement could improve efficiency, and with the right commercial model, also help to cut costs. Greater automation of reconciliations is another big win.

“The industry also spends a lot of time managing information such as fund documentation plus entering into legal agreements regarding service level agreements and T&Cs. Again, these are all things that could be standardised to drive down costs.”

The review will be chaired by Fidelity International head of business development Ed Dymott. Responses to the RFI are due by mid-July.