Cross-Border Distribution of UCITS

A CACEIS PRODUCT DEVELOPMENT PUBLICATION - 2011

CHALLENGES & OPPORTUNITIES

standardised, complete information on French collective investment schemes marketed out- side France. In this framework, a project aiming at setting up a product reference database has been initiated by AFG in early 2011. > Provide management companies with better information about the liabilities of the funds un- der their management, notably through systematic order marking. > Promote direct ordering under a secure legal framework in which foreign investors and dis- tributors can deal directly with the management company, thereby benefiting from a system similar to the transfer agent system. • Efforts are also being made by the Asian Fund Automation Consortium (AFAC) , a group of global fund managers in Asia created in September 2006 seeking to increase automation with distributors by defining a common STP strategy for each country. They notably encourage the mutual fund industry to use SWIFT ISO 20022 messaging standards. Mandated by the fund industry to develop standardised messages for the subscription/redemp- tion process - leveraging the MT messages used for securities transactions -, SWIFT has been extending its electronic messaging offer to the fund industry since 2002, with 2 main objectives: 1. To improve data quality, as getting reliable data is an essential prerequisite before improving workflow automation. SWIFT has taken part in France’s BIC1 code implementation, allowing centralising agents to accurately identify distributors. 2. To improve workflow automation, through the ISO 20022 and Alliance LITE initiatives pre- sented hereafter. ISO 20022 standard In 2002, SWIFT launched its first practical solution based on ISO 15022, followed in 2004 by the SWIFTNet Funds solution ISO 20022, which covers domestic and cross-border distribution. The objective was to provide the investment fund industry with a set of messages specifically designed to address their needs. The adoption of the SWIFTNet Funds ISO 20022 messaging solution enables the investment fund industry to move toward a common standard based on modern and flexible XML technol- ogy as recommended by EFAMA in 2005. Today firms are encouraged by SWIFT and EFAMA to adopt ISO 20022 as their electronic mes- saging standard and where other domestic message standards still tend to be used, to imple- ment solutions to facilitate the necessary interoperability between those standards and ISO 20022. Indeed, using ISO 20022 single open market standard for all fund processes means enhanced quality, regulatory compliance and insensitivity to volumes, which facilites business growth. It also means minimised operational risks and costs and higher competitiveness. The full 20022 migration is expected at the end of 2012. At this point, SWIFT will turn off ISO 15022 MT mes- sage use on the SWIFT network for investment funds orders traffic and will support this actively entirely through ISO 20022 MX fund messages. Electronic messaging initiatives

3.4.2.2

Notice

CACEIS has been an active participant in the SWIFT “Early adopter” group of the new SWIFT XML format ISO 20022.

3.4

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