Share Class Conversions Statement Of Recommended Practice

2y ago
11 Views
2 Downloads
312.88 KB
5 Pages
Last View : 16d ago
Last Download : 2m ago
Upload by : Melina Bettis
Transcription

Share Class Conversions – Statement of recommended practice15th May 20141. IntroductionTISA members and suppliers to the industry have been considering the issues arising from theban on cash rebates on investments in funds, and the likely increase in the number of shareclasses offered by fund managers and platforms.The industry established a project (ExCo), which held a number of meetings to discuss the issuesarising throughout 2013. The ExCo agreed a final position on recommended industry practice inFebruary 2014. The outcome is this Statement of Practice.This Statement of Practice is intended to guide the industry – fund managers and platforms andtheir agents, such as Third Party Administrators (TPAs), in particular – on the processes to befollowed when considering share class conversions.Three main types of conversion were considered, namely:Bulk Conversions, where either the fund manager, platform or intermediary initiatesconversions for clients on a bulk basis, rather than individually,Customer initiated conversions, either directly or though their agent, such as anintermediary,Conversions upon a re-registration or transfer between acquiring and ceding parties,typically platforms.2. Standard rulesConversions are not switches.Conversions should not be effected by way of switches.This is because a switch will expose a customer to market movements and, potentially, to bidoffer spreads as well as failing to preserve the customer’s grouping. This is material, as a switchfrom a group 1 holding in an interest distributing fund, such as a corporate bond fund, heldwithin an ISA or SIPP, will have adverse tax consequences for the customer.Conversions must be between classes in the same fund, and with the same underlying property.Thus conversions between hedged and unhedged classes may not be treated for tax purposesas a conversion, but as a potentially taxable switch.To the extent that it is practicable, conversions should also preserve groupings. Where this isnot practicable, for example, because of differential distribution dates or where differentpolicies for charging of expenses between capital and income applies to different share classeswithin the same fund, then the policy on conversions, which may include restrictions on whenPage 1 of 5

Share Class Conversions – Statement of recommended practice – 15th May 2014conversions may take place, should be clearly and prominently explained in the schemedocumentation.Conversions should take place on customer request, except where scheme documentationprovides otherwise, such as where there are minimum holdings requirements or where thereare restrictions imposed by law or regulation on those permitted to hold a particular class.Conversions should also take place promptly, which is generally, except where conversions takeplace as part of a re-registration between parties, at the next valuation point. It should be notedthat no customer detriment will arise, as the customers entitlement to the underlying propertyof the scheme will not change, apart from the difference in annual management charge.Platforms or other intermediate unitholders may not support all classes of each fund carried.Therefore, conversions can only be effected in respect of classes carried by the platform.Similarly, fund managers may place restrictions, by size or value or type of holder, so conversionoptions may be limited. Where acquiring parties are not permitted to hold a particular class,they should request a transfer of a class that they are permitted to hold. In these circumstancesthe ceding party will carry out the conversion prior to transfer or re-registration.In all cases conversions, particularly where associated with re-registrations, should take placepromptly, and all parties should take steps to notify each other and effect the re-registration,transfer or conversion in a timely and efficient manner.3. Bulk Conversions3.1 BackgroundFirms may wish to reduce the overhead associated with multiple share classes by convertingcustomers from, say, a retail share class (where the annual management charge includesamounts used to pay platform charges and trail commission) to a platform class. This may bea platform or an intermediary acting for a number of customers.These recommendations only consider conversions from retail (bundled) share classes toplatform (unbundled) share classes. Bulk conversions from one unbundled class to anotherdo not present issues other than logistic.The principles to be observed are the same, regardless of the initiating party.3.2 Recommended PracticeIt is good practice for the platform to discuss a bulk conversion beforehand with the fundmanager (or their agent if the fund manager uses a third party administrator). This willidentify issues in advance to ensure that the process, which by definition will involvesimultaneous transactions with many customers, will run smoothly without inconveniencingcustomers.Firms are expected to analyse their customers’ combined holdings on a granular basis todetermine:The impact on customers of the conversion(s) to the target share class(es) and,Whether customers will suffer any detriment from conversion, andPage 2 of 5

Share Class Conversions – Statement of recommended practice – 15th May 2014Whether any detriment is material to affected customersFirms will consider the package of costs in moving from bundled classes to unbundledclasses, including the impact of platform and adviser fees (if any).Firms will give customers adequate notice of proposals, which will be at least 30 days, andwill clearly set out the customer’s options, including alternative funds and encashment, if thecustomer does not wish to move to the proposed target class(es).4. Customer Initiated ConversionsCustomers have the right, subject to any provisions of the scheme documentation (for example,holding size, or restrictions on type of holder), to convert from one class to another. Generally,conversions will be like for like. That is, accumulation to accumulation, group 1 to group 1, grossto gross, etc. Naturally, conversions can only be into classes available from the platform.5. Conversions with re-registration5.1 Standard PracticeRe-registrations and conversions are separate transactions.Industry practice is for re-registration to take place first, and for the acquiring party to carryout any conversions required by the customer.Conversions with re-registration will be subject to the standard time for effecting a reregistration, which is (for those parties that are members of TISA Exchange, or TeX) 6working days, together with the standard time for a conversion, which should be at the nextvaluation point.As set out above, conversions are subject to any restrictions set out in the schemedocumentation.5.2 Special ProvisionsSpecial provisions apply where the share class to be re-registered is not available on theacquiring party’s platform. This may be because the ceding platform has negotiated apreferred arrangement with the fund manager, or because the acquiring platform does notwish to support the particular share class concerned.In these cases, by agreement between the ceding and acquiring parties, the ceding party willundertake to convert into a class of share that is supported by the acquiring platform. Thisconversion depends on co-operation between the ceding and acquiring parties and theagreed standard is that conversion to the agreed class will take place at the next but onevaluation point, following which the usual procedures on re-registration apply.There will be cases where the acquiring party also has a preferred share class, not availableto the ceding party. In these cases there will need to be a further conversion from the classre-registered to the desired class.Page 3 of 5

Share Class Conversions – Statement of recommended practice – 15th May 2014In these cases customers, or their advisers on their behalf, should check with the acquiringplatform before re-registration on whether multiple conversions may be required.Page 4 of 5

Share Class Conversions – Statement of recommended practice – 15th May 2014Page 5 of 5

Share Class Conversions – Statement of recommended practice 15th May 2014 Page 1 of 5 1. Introduction TISA members and suppliers to the industry have been considering the issues arising from the ban on cash rebates on investments

Related Documents:

pg 86 Gram/Mole Conversions Grams to Mole Calculations pg 87 Gram/Mole Conversions Molar Mass Calculations pg 88 Conversions with Avagadro's number Mole Calculations Wkst pg 233 Molar Mass Moles/Molecules/Grams Conversions pg 234 Molar mass as a conversion factor Moles Practice pg 235 Molar mass as a conversion factor pg 237 Percent composition

Maths for Nurses: Unit conversions This booklet will provide an overview of the unit conversions for nursing students. If you have any problems in answering the questions within the booklet please contact skills@library.leeds.ac.uk for personal help using the maths support drop-in sessions. Also check out these e-videos and quizzes:

SDTM-ETL 4.0: Performing Unit Conversions in SDTM-ETL Author: Jozef Aerts, XML4Pharma Last update: 2021-04-20 Introduction For SDTM/SEND Findings domains, unit conversions are often necessary, especially for the population of -STRESN (numeric standardized result) v

Content download forms generate leads with the highest conversion rate for 57% of marketing influencers. The type of content downloaded also impacts the rate of lead-to-customer conversions. Webinar registration is another top type of lead generation form for 42%. 9 Lead Generation to Increase Conversions Survey

statement, the entity can summarize the statement, but they must still present the details in the financial statement notes (Exhibit 4). The new cash flow statement The Cash Flow Statement is the only statement that will retain its existing name. Its format is similar to today’s f

E5-13 Statement of cash flows—classifications. Moderate 15–20 E5-14 Preparation of a statement of cash flows. Moderate 25–35 E5-15 Preparation of a statement of cash flows. Moderate 25–35 E5-16 Preparation of a statement of cash flows. Moderate 25–35 E5-17 Preparation of a statement of cash flows and a statement of financial position.

a. Balance sheet, income statement, statement of shareholders' equity, and statement of cash flows. b. Balance sheet, auditor's report and income statement. c. Earnings statement and statement of retained earnings. d. Statement of cash flows and five-year summary of key financial data

Zoo Animal Nutrition IV Zoo Animal Nutrition IV (2009) was edited by M. Clauss, A. Fidgett, G. Janssens, J.-M. Hatt, T. Huisman, J. Hummel, J. Nijboer, A. Plowman. Filander Verlag, Fürth ISBN-13: 978-3-930831-72-2 To obtain a copy of the book, contact Filander Verlag at info@filander.de Dierenfeld, E. S. Conservation collaborations: nutrition .