+ processing Automation rate of cross-border fund orders reaches 66% in
+ Q4 2008 EFAMA today published a report on recent trends in standardization and automation rates of fund orders received by transfer agents (TA) in Luxembourg. The report is based on a joint EFAMA-SWIFT survey covering close to 80 percent of the total Luxembourg order volumes. A new report will be published in the autumn to cover the Irish cross-border fund market. From there onwards, EFAMA will report on the evolution of automation rates in the two main crossborder fund distribution centres twice a year. The goal of this initiative is to inform all institutions involved in fund processing as well as the European Commission, the European Parliament and other interested stakeholders about the industry’s progress towards greater standardization and automation.
The following figures highlight the main results of the report:
• The total automation rate of orders processed by Luxembourg transfer agents has grown by 7.6 percentage points to reach 66 percent in Q4 2008. Most of this growth (6.3 percentage points) comes from the ISO messaging standard adoption by fund market players. The percentage of automated orders based on the ISO messaging standard reached 41 percent in Q4 2008, with the remaining 25 percent representing automated orders based on bilaterally agreed proprietary formats.
• 65 percent of orders received by Luxemburg transfer agents are sent by order givers based in Europe, the Middle East and Africa. 30 percent come from Asia-Pacific and 5 percent from the Americas. Whereas ISO standardization rates reached 47 percent in the EMEA region and a similar 47 percent in the Americas, orders originated from Asia-Pacific reached only 8 percent ISO standardization.
Peter De Proft, EFAMA Director General, notes: “The survey offers a new tool to help EFAMA measure progress towards electronic and standardized processing of cross-border fund orders, and evaluate the impact of its recommendations in the area of fund processing standardization. From this perspective, the results show that the attractiveness of UCITS in Asia could be increased further by moving from manual orders to straight-through-processing. EFAMA is committed to identify possible actions for achieving this goal.”
Jean Sonneville, Head of Funds Solutions, SWIFT, adds: “The ISO standard adoption rate growth in the fund industry over the last two years (+ 6.3 percent) is very encouraging. We are committed to continue to work with fund managers, transfer agents, distributors and platforms to increase the pace of adoption and reach similar standardization levels as for other securities. Key success factors include implementation of EFAMA’s best practice recommendations for fund processing, the new ‘single template’ for fund orders (ISO 20022-based) as well as focussed ‘kill the fax’ and large-scale standardization campaigns by fund managers, transfer agents and platforms."