With the UK financial services industry set to embrace re-registration of assets across platforms by 2013, there are several challenges ahead over the next couple of years.
The current re-registration process is complex and time-consuming and moving assets can take months. In addition, a number of providers will not transfer investments in-specie; meaning some investors have to sell their investments and transfer cash to new providers, exposing them to out-of-market risk.
There are also a range of complications linked to industry collaboration, including defining a commonly understood set of implementation systems and procedures. Software interoperability presents another challenge; products and systems must link to re-registration messaging interfaces smoothly to avoid disrupting the re-registration process.
Technology can play a major part in meeting these challenges. Some of the leading solutions available enable the transfer of a broad range of assets and wrappers, providing a common, cross-industry system for re-registration. In addition, elite systems can exceed the 11-day Service Level Agreement (SLA) turn-around set out by TISA, taking under twenty-four hours to complete the process.
Integrating technology platforms can have multiple benefits. Key motivations for the industry are clear:
- Greater efficiency – improved scalability of operations and reduced costs, resulting in greater profitability for players and lower costs to investors;
- Reduced operational risk – through the replacement of manual re-keying of orders by straight-through processing;
- Enhanced service – through improved response times and standardised interfaces.
As the 2013 re-registration deadline approaches, fund managers and platforms need to make critical decisions now.
What are your views – have you engaged technology to smooth the re-registration transition?