For Immediate Release: Thursday 18 March 2004

IMA’S RESPONSE TO THE FSA’S STATEMENT ON MARKET TIMING

The IMA today welcomes the announcement by the FSA that late trading and market timing is not systemic in the UK authorised investment funds industry.

The statement issued by the FSA indicates that control processes in the UK effectively deter late trading and although there is some evidence to suggest that UK authorised investment funds have been affected by market timing, the FSA has confirmed that it “ does not appear to have been a major source of detriment to long term investors”.

UK fund managers have been aware for a number of years of the potential damage that market timing can cause to fund investors and have, together with the IMA, fully co-operated with the FSA during the course of its investigation.

The FSA has highlighted a number of areas, already identified by the industry, in which fund managers could usefully review their internal procedures, particularly in relation to aggregated orders received from intermediaries, which potentially might conceal market timing.

IMA welcomes the Regulator’s response to industry requests to provide clarification and expansion of existing rules, in particular with regards to fair-value pricing and the right of managers to refuse to accept deals. The IMA continues to work closely with its Members, codifying relevant regulatory and procedural tools in relation to market timing.

Richard Saunders, Chief Executive of the IMA, commented:

“The industry has long been aware of the potential risk of market timing to investors and has relied on relevant regulations and good practice to deter such abuse in the UK. The IMA is pleased with the FSA’s confirmation that UK managers are aware of the risks and that they are making best endeavours to protect investors from the activities of market timers. Going forward the IMA will continue to work with its Members and the FSA to maintain integrity and investor confidence in the UK investment funds industry.”

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For further information, please contact;

Helen Stephenson, Communications Officer, IMA, 020 7831 0898

Jim Irving, Senior Regulatory Adviser, IMA, 020 7831 0898

Richard Saunders, Chief Executive, IMA, 020 7831 0898

Notes to Editors:

1. The FSA’s statement can be found at  http://www.fsa.gov.uk/pubs/press/2004/024.html

2. A market timing briefing note is attached

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