ISSA Mutual Funds Working Group

Dematerialised Fund Sales Agreements Initiative

One of the areas addressed by the ISSA Mutual Funds Working Group is the fund distribution process. Within that context, Schroder Investment Management presented an initiative towards more efficiency in the creation of mutual fund sales agreements. The project is led by Schroders but is a collaborative effort by a number of firms.

Sales agreements should be standardized to the extent possible (a legal issue) and they should be dematerialized, meaning that they should be made suitable for electronic creation, transmission and storage (an operational issue). A concept document drafted by Noel Fessey, Schroders' Global Head of Fund Services, describes the way towards a common legal foundation and it includes a draft master fund sales agreement. In addition, it outlines an adaptable technical framework, based on open standards, that is capable of supporting a wide variety of business models.

ISSA endorses the initiative as a valuable contribution to the funds industry towards end-to-end process efficiency and automation.

The project has now reached a degree of maturity where wider industry participation is invited. A dedicated website has been established at www.dmfsa.info where more detailed information, updated working documents and progress reports can be accessed. In addition, a discussion forum open to all interested parties exists at www.swiftcommunity.net/dmfsa/