Industry bodies combine to overhaul trading process

Industry bodies combine to overhaul trading process

Trade bodies are seeking input on a project aimed at overhauling the way UK-administered funds are traded and settled.

A group of companies and industry bodies, including the Investment Association (IA), Tax Incentivised Savings Association (Tisa) and Wealth Management Association, have established the project, dubbed UK Fund Trading and Settlement (UK FTS).

A statement from the IA noted that the project “reflects a widespread view that there are opportunities to improve the operational processes that sit between fund managers and distributors in respect of fund settlement in the UK”.

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The group behind the project, which has been running for “a number of months”, now plans to issue a request for information, expected in June, among firms and bodies that could support the initiative.

It said the group was open-minded about future steps, and would consider all avenues to improve the trading and settlement process. It said the current system was too complex and costly.

“UK FTS is open-minded about the potential outcome of the process, believing there are a range of different solutions that could be considered,” the group noted.

“This could lead to simple improvements to the inter-operability of the existing fund trading and settlement process, or could create a completely new service utilising emerging technology solutions such as blockchain.”

The group has appointed Fidelity International head of business development Ed Dymott to chair the review. Tisa’s Charles McCready will be programme director and collate consultation responses.

IA interim chief executive Guy Sears said: “The overall process for trading and settling fund holdings in the UK is disjointed and expensive, suffering from a lack of common industry standards and parts of the process are currently carried out manually.”