Rules for transfers of investment units changed

Electronic transfers of assets within investment funds will be made easier, after the Financial Services Authority (FSA) confirmed new laws on the issue.

The regulator has approved paperless sales or transfers of ownership of units within authorised unit trusts or open-ended investment companies.

Previously, an investor was obliged to authorise these transactions in writing.

Now, an email or other online conformation will be enough.

The law has been changed both for investors’ and fund managers’ convenience, as well as for financial reasons: in all, the FSA estimates that administrative savings of up to £290 million a year can be made by the firms as a result of the new rules.

Dan Waters, FSA director of retail policy and conduct risk, said: ’[This] will help fund managers to make the move from the current cumbersome paper-based transfer system to electronic dealing and settlement without weakening protection for unitholders.’

Julie Patterson, director of authorised funds and tax at the IMA, added: ’We welcome the recent changes to legislation and FSA rules, which will allow the processing of redemptions and transfers of authorised funds to be fully automated.’ADNFCR-2318-ID-19119332-ADNFCR