Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CHALLENGES & OPPORTUNITIES

3.3

Information referencing issue

3.3.1

The lack of a pan-European fund database penalises cross-border distribution

In the context of cross-border fund distribution, access to reliable and updated informa- tion is a key factor in the success of controlling operational risk relating to execution and settlement of subscription and redemption orders. Indeed, these funds have often different characteristics (dealing frequency, NAV frequency, pricing, settlement details, cut off times etc.) that require careful attention before placing an order. To date, unfortunately, it is very difficult to obtain in a relatively easy way operational infor- mation on the various products which can be the object of a cross-border public distribution as there is no pan-European fund database and the existing fund databases are deficient; Most of them give only access to fund prospectus consultation and not to the information necessary to place and process orders correctly. Hence, fund trade processing tends to be more complex when clients want to purchase third-party funds, especially when they are domiciled abroad.

3.3.2

The Fund Processing Passport, an EFAMA initiative

In light of this, the concept of a Fund Processing Passport (FPP) was developed by EFAMA’s Fund Processing Standardisation Group (FPSG) in 2007-2008 and was drawn up from the viewpoint of all relevant professional players involved in the operational aspects of invest- ment funds distribution: Investor intermediaries, distributors, distribution platforms, fund management companies and their service providers (transfer agents/registrars, fund ac- counting agents, trustees, custodians, portfolio managers).

The FPP aims at solving the information problems faced by banks, other distributors and their services providers when processing third-party advantages, a few years after its launch, the FPP concept is still far from being an operational reality within the investment fund industry. fund transactions. Despite its many

O bjective , content and initial principles

The FPP is a short, single and fully harmonised document made of 105 standard fields which aims at solving the information problems faced by banks, other distributors and their serv- ices providers when processing third-party fund transactions, by providing them, at class level, with all the information required to initiate and process orders correctly, such as con- tact details of a local fund order desk in a given country, cut off time, currency, order forms required, etc. Each FPP is composed of a “core data” section describing the most common arrangements handled by the “main fund order desk” in the fund home market and of annexes describing the country-specific information concerning the dealing/settlement arrangements for other markets where the class of unit/share is also distributed.

3.3

The FPP initial principles defined by EFAMA are presented hereafter:

Cross-border distribution of UCITS | page 49