A third of fund managers will outsource back office functions in 2013, says KNEIP
One third of fund managers are planning to outsource back office functions over the next 12 months, according to research by KNEIP.
This figure has almost doubled since last year, when just 18 per cent of fund managers planned to outsource these activities.
All figures are based on the results of a recent survey of KNEIP clients, which gathered the results of more than 130 fund companies worldwide.
Of the functions identified as most likely to be outsourced, those relating to Ucits regulation and the KIID were amongst the most prominent. Approximately 17 per cent of the respondents who noted they would be contracting out back office functions said that they intend to use external providers for their KIID production. Additionally, 22 per cent and 16 per cent percent, respectively, revealed that they would be outsourcing the dissemination and regulatory filing of their KIIDs.
Mario Mantrisi, chief strategy and research officer at KNEIP, says: “While the reporting requirements of regulations such as Ucits IV and V are helping to ensure greater transparency and build investor confidence in the industry, they are also taking up a large amount of fund managers’ time, diverting them away from core business activities. It is therefore unsurprising that many asset managers intend to contract out their back office functions this year.”
Survey participants were also asked what difficulties they anticipated with their KIIDs over the next six months. 53 per cent of fund managers identified keeping their KIIDs up-to-date as the greatest challenge. A further 21 per cent stated that filing with regulators is their main area of concern.
“Under Ucits IV, all fund managers must revise their KIIDs following any ‘material’ changes to the underlying fund, including changes to the investment policy, fund objectives, fund rules and articles of incorporation. The revised KIID must then be filed to the regulators in each country in which the fund is distributed. KNEIP and CETRELSecurities have partnered to provide a secure filing solution for the investment fund industry, to open the marketplace and ease the burden to managers,” says Mantrisi.
KNEIP’s solution for automating the production and disseminating KIIDs is now sanctioned by the Luxembourg-regulator, the Commission de Surveillance du Secteur Financier (CSSF), and is capable of managing the process in 30 European Economic Area countries. In 2012 KNEIP was mandated for the production of over 24,000 KIIDs and the dissemination of over 33,000 KIIDs using this system.
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