PRESS RELEASE

For immediate release: 9 July 2003

Trade associations work together
to improve efficiency for unit trusts and OEICs

UK trade associations are working together to modernise the trading and settlement of unit trust and OEICs across Europe.

The Investment Management Association (IMA), Association of Private Client Investment Managers and Stockbrokers (APCIMS) and Association of Independent Financial Advisers (AIFA), together with the International Securities Association for Institutional Trade Communication - Europe (ISITC Europe), are working together to find a long-term industry-wide solution to improve operational efficiency, particularly straight through processing (STP), for retail funds.

Automation in the trading and settlement of retail investment funds (unit trusts and open-ended investment companies) has not kept pace with the evolution in the equity and bond markets. As a result, fund transactions have comparatively high dealing costs for both users and operators.

Together, as part of a working group established and led by ISITC Europe, the associations aim to create a viable business model using industry-accepted messaging standards that will be capable of forming the basis for future industry developments across Europe, while providing value for investors.

Other participants in the project include representatives from fund management companies, distributors and consolidators (such as IFAs, stockbrokers and fund supermarkets), custodians, systems vendors and other service providers to the industry.  Through their participation, the project is also drawing upon the significant practical experience of organisations such as EMXCo, Euroclear and the Depository Trust & Clearing Corporation (DTCC), plus SWIFT as a setter of message standards for securities trading and settlement.

Richard Saunders, Chief Executive of the IMA said:  “Despite the progress over the past few years, buying and selling investment funds is still not as efficient as other areas of the securities markets.  There is still considerable scope to bring the processes used for retail funds in line with the institutional business.  The many associations and interested parties keen to be involved in this project shows an appreciation of the situation and an enthusiasm to find an appropriate solution.”

Angela Knight, Chief Executive of APCIMS said:  "This is all about choice – allowing investors to choose the right product without having to consider how much it will cost them.  It is also about making the process faster, better and cheaper for all of us.  When we ultimately resolve this issue everybody will win – from the investors and intermediaries to the fund providers. It is an excellent initiative.”

Paul Smee, Director General of AIFA said:  "Anything which improves operational efficiency will be welcomed by IFA firms and beneficial to their clients".

Stuart McKinlay, Chairman of ISITC Europe said:  "This has, until now, been a largely forgotten part of the securities business and it is now receiving an appropriate focus and co-ordination. Clearly the role of the retail business as the engine to deliver instructions and business through to the institutional players is now receiving the same focus and best practice review for operational efficiency that the traditional businesses have already enjoyed.

True end-to-end straight through processing most definitely starts here and the co-operation among the different groups represented will surely provide an object lesson for the industry."

- Ends -

For further information and comment, please contact:

David Ewings - ISITC Europe, Contact via www.isitc.org
Clare Arber - Head of Communications, IMA, 020 7831 0898
Brian Mairs - Head of Information, APCIMS, 020 7247 7080
Tracey Mullins - Director of Public Affairs, AIFA, 020 7628 1287

Note to Editors:

1.       The total value of transactions (sale and redemption) in UK authorised investment funds during the 12 months to 30 April 2003 amounted to in excess of £82 billion.

2.       Of the above figure, nearly £67.5 billion of trades were transacted by investment institutions or through intermediaries such as IFAs, stockbrokers and fund supermarkets.

3.       ISITC Europe is part of ISITC-IOA, a global working committee of securities operations professionals representing custodian banks, investment managers, brokers, and vendors. Their goal is to foster alliances and advocate standards that promote straight through processing (STP) of securities transactions.

Their mission is to support global securities operations, to promote STP throughout the securities industry, to recommend and endorse operating standards that will reduce risk and increase efficiency, and to use the combined expertise of its members to address developments within the industry.

4.       EMXCo are the providers of a system, developed on behalf of the UK fund management industry, which links IFAs and product providers and allows IFAs to place orders and valuation requests electronically.

5.       Euroclear is the world’s largest settlement system for domestic and international securities transactions, covering bonds, equities and investment funds. Its FundSettle platform automates and standardises the straight through processing of offshore and domestic fund transactions.

6.       The DTCC, through its National Securities Clearing Corporation subsidiary’s Fund/SERV system provides centralised clearing and settlement of transactions for the mutual fund industry in the U.S. and a growing percentage of transactions in European cross-border funds.

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Tel: +44 (0) 20 7831 0898 Fax:+44 (0) 20 7831 9975

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Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737.  Registered office as above.