As the European Financial Industry have been coming to terms with the European PRIIPs and MiFID templates, the Investment Association in collaboration with the Association of British Insurers have developed the UK focused DC Workplace Pensions Template (DCPT) as well as the Fair Value Mid-Price Template (FVMP).
The priority of these new templates is to serve defined contribution workplace pensions governance bodies, meaning that they are required to disclose information on transactions costs and charges for the funds that they offer. This requirement also applies to asset managers, who are required, by regulation, to respond to requests for information regarding costs as per the FCA Handbook (COBS 19.8). In addition, the requirement to make the costs and charges information for defined contribution occupational pensions’ schemes publicly available, also applies for trustees.
Recently, KNEIP conducted a market survey amongst their UK based Asset Management clients and any Asset Managers who distribute their funds into the UK. The survey results proved that UK domiciled and registered funds have an increasing demand for costs & charges data reporting in the DCPT format. Whilst it proves that the template put in place by the national industry has been widely accepted, it also makes it clear that Asset Managers should not only look at EPT and EMT, but also prepare to serve data requests of DCPTs and FVMP without any timely delay.
The inability to provide this data may result in the failure of the pension scheme to invest in the targeted fund.
“To be able to do this so quickly is nothing short of spectacular!”
– Francesca Cherubini-Stoughton, Rathbones
With references made to the arrival price method under PRIIPs, Asset managers are able to leverage the underlying data produced in the context of their transaction costs’ calculation for their PRIIPs KIDs, EPTs and EMTs.
Data is at the heart of KNEIP’s new digital platform, so that a single source of data can be leveraged across multiple outputs, including the transaction costs’ calculation engine. This enables asset managers to use the link between their data to serve a range of outputs, not just EPTs and EMTs, but also the production of their DCPTs and FVMPs. Without any additional integration efforts needed, the production of DCPTs / FVMPs can now be done in a single click.
Now, the user is certain that all calculations are derived from the same source of data, which secures ongoing consistency across all outputs.
This is not just a vision of KNEIP, but reality, as underlined by recent client feedback. Francesca Cherubini Stoughton, a consultant at Rathbones, leading the PRIIPs and MiFID II project, has been deeply involved in the transaction cost calculation. After finishing the first Rathbones DCPT roll out she commented “… in less than five minutes, we were set up for the product and had calculated, validated and published a DCPT for one of our funds. To be able to do this so quickly is nothing short of spectacular!”
KNEIP digital transformation has arrived.
By Ulf Herbig