Fund distributors are required to make their first ‘target market’ reports available for fund managers by April 30 next year.
The requirement from the Tax Incentivised Savings Association (Tisa), a UK trade body, relates to client information that fund managers need to obtain in order to satisfy a key MiFID II distribution rule.
Ongoing reporting should be at least quarterly, said Tisa in its framework for target markets published today.
Tisa’s framework is meant to solve the problem of how fund managers can comply with MiFID II’s target market rules even though they often do not hold client data when funds are sold through third parties.
The target market requirement is part of the investor protection element that runs through MiFID II – the revised Markets in Financial Instruments Directive – that comes into force in January.
Fund managers, who are generally referred to as fund manufacturers under the directive, should receive at least quarterly reports, with each report covering a one-month period and delivered within a month of it, said Tisa.
Poppy Achilles, project manager at Vanguard Asset Management, and Graham Taylor, business systems analysis manager at Cofunds, have led a working group at Tisa that has also endorsed a European Working Group initiative about how data should be standardised, though it is seeking some clarifications.
Jeffrey Mushens, technical policy director at Tisa, said: “We have developed a framework for target marketing reporting which we hope will be a useful and a significant guide in preparing for new reporting requirements.
“Similarly, we are pleased to see the work that the European Working Group has produced on standardising data for client reporting.”
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