UK- The National Association of Pension Funds and Investment Management Association have introduced a transactions code in direct response to the recommendation in the Myners review that pension funds should look more closely at the commissions and costs they pay.

The code has a basic two-tier format. Level one deals with investment managers' philosophies, policies, and processes relating to its costs and level two covers should give client specific data on actual costs incurred.

Launching the code at the NAPF's investment conference in Edinburgh, the IMA's Lindsay Tomlinson said the industry had come under pressure from the government to make its costs structures more transparent, particularly soft commissions, on which some industry players have already acted. Other areas the code is designed to highlight are custody costs, taxes, transaction costs, commissions paid and bank charges.

Though compliance with the code is not yet compulsory, the IMA and NAPF warned that fund managers that refused to adopt it could lose business. Moreover, the NAPF says the government has warned it will consider making compliance compulsory if, after two years, it feels not enough managers have adopted it.

Says Tomlinson: "this is a major new challenge for the fund management industry in this country and we hope it will lead to a greater understanding and transparency of its costs, particularly in relation to its pension fund clients."