30 April 2013

TeX – The answer to Transfer

and re-registration delays?

Industry funded, not for profit association.

Set up to provide governance for re-registration

and electronic transfers

Sets membership fees, guardian of the legal

agreements and TeX Register.

It is a Contract Club

Supported by FCA

What is TeX?

To allow the electronic transfer & re-registration of

funds.

(UK-registered unit trusts and OEICs)

To allow the electronic transfer of ISA wrappers.

Designed for the transfer of clients’ assets when they

move from one platform / nominee / fund manager /

wealth manager to another

Already pressure from Offshore Funds and SIPP

operators to join

TeX Objectives

4

What about the regulators?

We have engaged and shared with the FSA the details of

the TeX contract club and the principles behind it. The FSA

have supported such an industry led solution and confirmed

it will help meet the policy expectations as set out in PS11/9.

The FSA continue to stress that if their policy objectives are

not achieved it may require further rules being introduced to

areas of the marketplace which are not working towards

making re-registration take place in a reasonable time and

efficient manner. The FSA fully support the principle of a

consistent standard across the industry together with clarity

and transparency to the consumer.

FSA 21 December 2012

4

Why? - Regulation

Re-Registration is firmly in the FSA’s sights. The FSA’s Retail Distribution Review, Consultation Paper 10/29 stated in

paragraph 4.11 that: “In line with our proposals in DP10/2, we intend to

introduce a rule to make it compulsory for platforms to allow

assets to be re-registered off their platform no later than the

implementation of the RDR on 31 December 2012”.

FSA Policy Paper “PS11/9 Platforms” August 2011 paragraph 4.7:

“Given the TISA initiative, which we support, we do not think it is

appropriate for us to set prescriptive rules regarding timescales

for re-registration at this stage.

We will use the results of our post-implementation

review work to assess the industry’s progress and to determine

whether prescriptive rules are needed.”

Overcoming the

Contractual Paper Mountain

5

There may be 50

nominees

Plus 150

fund managers 1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

A

B

C

D

E

That’s up to

1,225 different

inter-nominee

contracts

... and up to

7,500 different

FM-nominee

contracts

With Tex, the “Contract Club”,you

sign one legal agreement

6

Byelaws

Platform

Terms

Fund

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

A

B

C

D

E

Contains standard template clauses on

data protection, dispute resolution,

liability etc

•Clauses around indemnity,

•Agreement to abide by SLA

•Acquiring Platform’s

responsibilities

•Ceding Platform’s

responsibilities

Predominantly indemnities

plus the agreement to abide

by the SLAs

Manager

Terms

One single contract, everyone has the same rules

• The alternative is side letters with every counterparty.,

Strong Corporate governance

• Industry directors, representing fund managers and

platforms (inc wealth managers and wraps) run TeX

• 75% majority for changes. Changes need consent

TISA directors represent industry as a whole.

7

Why the Contract Club works

7

The Latest

• 44 Members and 4 Associate Members

• Another 13, plus 5 potential associates currently going

through the joining process and another 28 in

conversation.

• Vast majority of platforms by AUM have joined or

committed (over 90%)

• Over 77% of FUM fund managers have joined or

committed

• Testing by suppliers to ensure system inter-operability

is in progress. It works!

• A logical and fair apportionment of risk and liability

• A simple system which is comprehensible

• Will decrease disputes and uncertainty as to liability

• Will work alongside existing fund manager/platform

agreements

9

TeX – Contract Club

Advantages

Are you an authorised firm and do you have the following

permissions?

• Agreeing to carry on a regulated activity

• Arranging (bringing about) deals in investments

• Arranging safeguarding and administration of assets

• Safeguarding and administration of assets (without arranging)

If you carry out this type of business, your liability risks

need to be covered.

9

TeX – Who should

join?

• Re-Registration standardises industry process

• Satisfies PS11/9 compliance obligations

• Industry standard for messages – ISO20022

• Open standards, not proprietary standards

• Uses UKFMPG Standards. TeX members also

members of UKFMPG

• Model for other products

• Model for other markets

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TeX – Reasons why

• Joining fee of £12k per group.

• Annual fee of £3k for a platform/ISA Manager/Service

provider

• A fund manager pays £2k pa

• Contract club means everybody knows the terms they

deal on, which reduces contract risks and legal costs

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TeX – How much will it

cost?

Join TeX

NOW

Enquiries:

Carol Knight – carol.knight@tisa.uk.com 01642 666989

Jeffrey Mushens – jeffrey.mushens@tisa.uk.com 07939 575093