The European Fund and Asset Management Association has published, in cooperation with SWIFT, a mid-year status report to present the evolution of fund order processing standardization rates during the first six months of 2010. This report combines for the first time data covering both the Luxembourg and Irish transfer agents. This report follows previous reports published in the course of 2009 and 2010 on Luxembourg and Ireland separately.

The goal of this initiative is to inform the European Commission, the European Parliament and other interested stakeholders about the industry’s progress towards greater standardization and automation.

The following figures highlight the main results of the report:

• The report covers 31 TAs in Ireland and Luxembourg, representing above 80% of the total incoming third-party investment funds order volumes in both markets. 11.3 million incoming orders have been processed during the first half of 2010. This is an increase of 28% compared to the first half of 2009.
  

• The total automation rate of orders reached 74.5% in Q2 2010 compared to 73.7% in Q2 2009. The ISO messaging standards adoption rate increased from 29.9% in Q2 2009 to 35.8% in Q2 2010, to the detriment mainly of proprietary file transfers.
  

• 47% of the orders sent by an Asia-Pacific-based institution directly to Luxembourg TAs were received in an automated way in Q2 2010, compared to 46.3% in Q2 2009. The ISO adoption rate in Asia-Pacific shows the highest increase: it stood at 13.6% in Q2 2010 compared to 10.8% in Q2 2009. This was mainly to the detriment of proprietary file transfers.
  

Peter De Proft, EFAMA Director General, notes: “The high total automation rate of orders and the significant increase in the use of ISO messaging standards represent encouraging trends. Still, the high rate of manual orders originated from the Asia-Pacific region confirms that further progress towards automation and standardization in global distribution of UCITS remains a must.”

Michèle De Boe, Head of Funds – Marketing Division, SWIFT, comments: “The findings confirm the trend of proprietary file transfers conversion into ISO standardized communication, in both EMEA and Asia-Pacific. This shows market players are implementing EFAMA’s recommendations by working simultaneously on “killing the fax” and standardizing their automated flows on ISO 20022. This is very promising for efficiency gains in the fund order processing space.”