July 17, 2012
Broadridge Financial Solutions
, Inc. (NYSE: BR) today announced the publication of an industry white paper that explores UK market views on the specific requirements set out in Chapter 5 (
Investing in authorised funds through nominees)
of the Retail Distribution Review (RDR). These rules relate to those organisations responsible for the provision of nominee services to retail investors investing in authorised funds, and demand the timely distribution of certain mutual fund information and notification of voting events to all underlying investors.
"This white paper presents the many concerns of firms that are faced with implementing mechanisms in order to be compliant with the upcoming rules," said
, President, Investor Communication Solutions International, Broadridge. "Its findings reveal that firms need to focus on methods of electronic communication and evaluate other ways to minimise costs, such as considering streamlining operational functions and making use of outsource partners. It is also important that they look to execute best voting practices and ensure that business decisions made today reflect the possible direction of future legislation."
The Broadridge white paper, "
RDR Intermediate Unitholder Obligations - The Developing Landscape for Nominees and Retail Investors
," has been produced in association with UK specialist benchmarking and research organisation, ComPeer Ltd. The publication is based on industry research and interviews with a range of market participants including wealth managers (execution only, discretionary and advisory firms) and platform providers. The paper offers a detailed insight into the potential impact this new legislation may have on those holding nominee accounts – banks, brokers, mutual fund holders and fund platforms – and delivers a comprehensive overview of the challenges and concerns that firms may face and the compliance strategies they are managing.
The FSA-inspired policy aims to supply investors who access authorised funds through a nominee with the same information as those holding units in funds directly. Specifically, these mutual fund nominees (or intermediate unitholders) will have to make available information that informs the individual investor about their investments, such as short reports. In addition, a firm must send notifications of voting events, along with a summary of the events' subject matter and possible consequences of the voting outcome.