UK - New IMA fund processing guidelines have been published to help UK investment management firms reduce risk and cost.
The UK’s Investment Management Association (IMA) has issued a set of six fund processing principles aimed at back office operations in response to a desire for improvement in the industry’s operational infrastructure.
“Implementing these good practice guidelines should reduce risk because operations will be carried out more efficiently,” says Helen Stephenson, communications officer, IMA.
“It should also reduce long term operational costs because everything will be done electronically. Many managers do use electronic messaging at present, but not in a standardised way.”
Although the IMA represents retail funds, Stephenson says the principles apply equally to institutional products.
The principles are that fund providers should:
• Accept and encourage the use of electronic messaging, as far as practicable, for all communications with client-side institutions;
• Summarise key operational information relating to their funds and make it available in a standardised format;
• Adopt standardised requirements in respect of account opening information and retention of distributor account references;
• Adopt and promote the use of unique international standard identifiers for funds, themselves and other counterparty financial institutions;
• Acknowledge receipt of orders and issue confirmation of execution, as soon as possible, within an electronic messaging environment;
• Make or collect settlement electronically, or via CREST as the UK Central Securities Depositary or via the international CSDs (Euroclear and Clearstream), on a predetermined date for the transaction.
Ms Stephenson said the guidelines had been issued in response to a perceived desire from members for infrastructure to be improved and standardised. Members would be asked to adopt the principles within two to three years.