Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CHALLENGES & OPPORTUNITIES

Market place groups’ initiatives

3.4.2.1

Among the market place groups actively working for more automation and standardisation in the fund industry in Europe and Asia, we can quote the following initiatives:

• For several years, standardisation and automation of fund processing have been at the top of EFAMA ’s agenda; The Fund Processing Standardisation Group (FPSG) established in 2003 to identify obstacles to efficiency in back-office procedures and to outline possible actions for removing them is still very active, as previously seen in the “Information referencing issue” chapter with the Fund Processing Passport. EFAMA’s FSPG has focused upon practical rec- ommendations on fund processing since its inception and the latest version of its report 37 re- leased in March 2011 was once again in this spirit. EFAMA disseminates its recommendations at national levels through domestic associations. EFAMA, in association with SWIFT, is now regularly publishing data obtained from the Irish and Luxembourg markets 38 to illustrate the growth in automation of fund order processing and the adoption of ISO standards in that field. • The TA ForumSteering Committee (TASC) , an ALFI subcommittee, liaises with the Luxembourg TA & Distribution Forum, a neutral discussion platform and sounding board, bringing together industry participants to share experiences and discuss issues related to fund distribution op- erations. It aims at building a bridge between fund distributors and Luxembourg’s operational community, focusing on fund administration services, particularly the transfer agent as a key partner to support and enhance the global fund distribution of Luxembourg domiciled funds. Its main objective is to enhance the ease of doing business with Luxembourg domiciled prod- ucts from a global cross-border distribution perspective. • A EUROFI working group of fund industry representatives has made complementary propos- als to accelerate the automation and standardisation of cross-border fund order execution, settlement and commissions tracking at an EU level: Setting up automated notification and authorisation processes, optimising processes to access and maintain key prospectus and processing data, standardising settlement deadlines, implementing industry-wide incentives to encourage small and medium sized distributors to adopt automated order input solutions, developing commonly agreed distributor codification at the right level of granularity, encour- aging further standardisation of legal terms and formats of distributor agreements. Evolutions in some existing practices of CSDs and in the risk monitoring and position keeping processes of some fund agents were also proposed to facilitate the handling of an increasing number of third-party cross-border orders with increasing amounts. • In France, the French Association of Asset Managers (AFG) and the French Association of Custodians (AFTI) have also been working together on this issue since a few years, issu- ing recommendations to enhance the whole fund order process. Furthermore, in July 2010 the AMF French regulator published a final report 39 of the asset management stakeholders’ committee including recommendations to favour the cross-border distribution of French funds, in particular: > Give distributors, investors (especially foreign investors) and order collectors access to

Notice

CACEIS supports the efforts of the fund industry to move toward greater standardisation, harmonisation and automation and actively participates in various market place groups in Luxembourg and France: > FPSG (EFAMA), > TASC (ALFI), > EUROFI Group, > ISSA Fund Working Group, > AFTI’s Investment Fund Stocks and Flows Group, > AFG’s FPP Portal Group, > Euroclear France UCITS order routing platform Group, > AFG’s product reference database Group, > Asset Management Stakeholders’ Committee (Haut Comité de Place).

37 Source : EFAMA, “Standardisation of funds processing in Europe”, March 2011 38 Source : EFAMA& SWIFT, “Fund processing standardisation, tracking industry progress”, Mid-year and full year reports 39 Source : AMF, “Report of the Asset Management Stakeholders’ Committee – Implementation into French Law of UCITS IV : Situation and outlook for asset management regulation”, 26 July 2010

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