Newsletter

Newsletter No. 22

November 06, 2012

The current newsletter is focused on one particular topic:

Best Practice in Fund Document Dissemination

Since the introduction of the Key Investor Information Document (KIID) in Europe in mid 2012 and the introduction of the Key Facts Statement in Hong Kong and the Product Highlight Sheet in Singapore, the focus has shifted from document creation to document dissemination. Since then, some service providers have included this service (referred to as “KIID dissemination”) in their sales programme, bringing it to the attention of fund companies and distributors such as banks and fund platforms.

Since its launch back in 2005, fundinfo has collected and disseminated more than 3.5 million fund documents of more than 800 fund companies in 31 countries and 27 different languages, establishing itself as the leading hub for fund documents in Europe and Asia.

Drawing on a wealth of experience gained over the past few years, we have compiled a list of the “10 Best Practices in Fund Document Dissemination“.

1. Accurate document dissemination requires accurate basic information.
2. There are three options with regard to country-specific registration.
3. Metadata is required for fund document dissemination.
4. Document management should be centralised.
5. There are many different document types in addition to the KIID.
6. Document management processes should be linear.
7. Data errors should be corrected in the primary source.
8. Complexity increases disproportionately to the number of parties involved.
9. The best delivery method depends on the fund company.
10. Complexity is set to increase further.


1. Accurate document dissemination requires accurate basic information.
A minimum amount of information is required for fund documents to be sent to the correct destinations, namely the corresponding identifiers (the most important being document type, language and “valid from” date) as well as correct share class allocation.


2. There are three options with regard to country-specific registration.
Most fund databases currently feature country-specific registration (or “legal registration”) for each individual fund. However, they do not always allow a distinction between “funds for qualified investors” and “retail funds” within the different countries.
We often come across cases of share classes of legally registered funds which are not to be shown for certain countries for distribution reasons. For this reason, we specify both “legal registration” and “marketing registration” for each individual fund and country. Whether or not—and, if applicable, where—a given fund is to be shown in a given country is determined by a combination of these two characteristics.
Completely irrespective of this, each document has a country code indicating the countries in which the document is to be shown. If a given fund is shown, this feature determines whether or not the document is to be made visible. A good example of this case is that of the KIID: Here, it is recommended to activate the “generic English version” of the KIID right away for all EU countries even if the fund is not yet registered for sale in all countries. This ensures that the “generic English KIID” is automatically shown as soon as approval is obtained for a given country. That way, the KIID will not need to be replicated every time approval is granted for a different country.


3. Metadata is required for fund document dissemination.
Document type, language, publication countries, record date and other information is required for fund documents to be delivered to the correct destinations.
This information may be supplied in a separate file, typically in CSV or XML format. The main advantage of this method is the ease of machine processing that it offers, while the main disadvantage is that the PDF file is worthless on its own without the CSV/XML file as it lacks the necessary dispatch information.
For this reason, we developed a technical solution several years ago for sending metadata along with the individual PDF files. Working with service providers KNEIP and Morningstar, we have improved the specifications and made this solution freely accessible with no copyright restrictions. Meanwhile, we have seen this “embedded metadata” become the standard, at least for KIIDs.
It goes without saying that we accept a wide variety of transmission methods for fund documents, e.g. email attachments, uploading via a dedicated tool, ftp-push, ftp-pull and all types of CSV/XML link files. Altogether, we offer around half a dozen different document transmission methods.


4. Document management should be centralised.
Many fund companies are still largely structured on a national basis. This often results in duplicates and inconsistencies with regard to document dispatch when the same document is sent to different recipients by different units with different separate metadata files.


5. There are many different document types in addition to the KIID.
Of the over 1.2 million documents that fundinfo processed in the first nine months of 2012, 430’000 were KIIDs; the remaining 770’000 PDF files comprised 23 different document types, among which monthly factsheets still represent the largest share at 700’000.
Nevertheless, judging by the services offered by the various service providers, one gets the impression that it is only the KIIDs that require dispatching. Therefore, we advise not to focus solely on KIIDs but to organise document management in a comprehensive and systematic manner.


6. Document management processes should be linear.
Failure to adhere to this fundamental principle is the cause of major inefficiencies. If a fund provider allows documents to reach the point of sale via a number of different routes, there will inevitably be duplicates and inconsistencies.


7. Data errors should be corrected in the primary source.
We have seen various cases of data providers repeatedly sending the same data errors for more than a year. In order to prevent data that has been corrected in our database from being overwritten by incorrect data, we delete the incorrect data. If we were to overlook this step even just once, this would undermine quality control for subsequent data or document dispatches.
This is one of the reasons why we insist on delivery directly from the primary source. Initially, this request is often met by a lack of understanding especially when fund providers are convinced that they can solve all of their internal problems by hiring a third party. However, our experience shows that quality is the weakest link in a chain of document distributors. Worse still: a multi-level distribution chain can lead to an accumulation of errors, which can be virtually impossible to eliminate.


8. Complexity increases disproportionately to the number of parties involved.
We introduce a new enhanced database model virtually every two years to meet the ever-changing demands of our industry. However, more important still is our knowledge of our fund partners’ organisational structures. We often have more than half a dozen contacts for document delivery for a single client. With more than 800 fund companies on our platform, one can easily understand that is not always easy to reach the person able to correct the errors in question once and for all.


9. The best delivery method depends on the fund company.
For small fund providers with just a handful of funds, the best method of sending documents is by email; Large fund companies with several thousands of documents to dispatch every year to many different countries will require electronic interfaces through which they can do so directly. Therefore, we offer a wide variety of viable, proven methods.


10. Complexity is set to increase further.
Since its launch, fundinfo has acted as a document hub receiving its partners’ fund documents from their primary sources and dispatching them to a wide range of fund distributors and information platforms. Today, we are able to specify whether:

  • funds are to be made accessible to all investors, to a select group of investors or not at all in the different countries;
  • documents are to be made accessible to professional investors only or to all retail clients;
  • documents are to be displayed on www.fundinfo.com and forwarded, or not, to a select group of media partners.

We welcome any suggestions, requests and questions, which will help us continue to improve fundinfo.com and make our fund platform as useful and valuable a tool as possible.

Yours faithfully,

Your fundinfo.com team

 

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