When it comes to online dating, the biggest fear that people have is that, after having announced where and when to meet their date, they duly turn up and find themselves waiting… and waiting… a quick check of the watch after 20 minutes… still waiting… then it sinks in: the date is a no show.

Week From Hell

It’s an uncomfortable feeling, even though they might belatedly contact you afterwards to apologise that they’d had a ‘week from hell’ and that the date had simply slipped their mind.

Within the funds industry, it is possible to inadvertently create similarly embarrassing situations with investors when it comes to adhering to a key compliance function: corporate actions, otherwise referred to as legal announcements.

When creating any new fund product, one of the first things to do is to create a prospectus, where investors are informed of the events in the lifecycle of that fund that will be announced to them.

Typically, these legal announcements can include: Annual General Meetings; dividend disbursements; Exceptional General Meetings, fund manager, and other changes to the prospectus that the asset manager commits to communicate to its investors.

Just as a quick text message will remind a date to turn up on time, so rigourous communication of legal announcements keep investors informed, forming the basis of a trusted partnership.

Hit That Deadline

Given that they are a key element of compliance, the last thing an asset manager (or their appointed legal counsel) wants is to overlook the timely publication of these corporate announcements. In all cases where they are still issued in the print realm, not hitting these deadlines can lead to a number of knock-on effects:

– Risk of falling out of compliance
– Investor complaints and even claims against the asset manager

Like any good online dater, therefore, fund managers must ensure that they communicate in a timely fashion to avoid the potential for a no-show at an Annual General Meeting.

The prospectus might say that the AGM will be held on the third Tuesday of March every year and will be announced six weeks prior. From that point forward, the manager is required by law to ensure that that happens.

A Logistical Nightmare

But think about it. An AGM can involve bringing out the portfolio management team, the product managers from different offices, investors from different counties etc., to a specified location. Imagine, then, the potential chaos and embarrassment that might ensue if the day of AGM announcement falls on a public holiday, a weekend, or a non-print day of one of the required publications.

Many circumstances, all perfectly innocent, can lead to legal announcements not getting published. And this can lead to logistical nightmares. An asset manager scheduling multiple publications might not know to take into account that a required publication in one country is only bi-weekly, or in another country, the publication date falls on a legal holiday. In these cases, print deadlines can be missed inadvertently.

Faced with this, investors might start to complain and cause a fuss, and, well, react like the jilted date.

And that’s a best-case scenario. Worst case, an asset manager can face sanctions for missed publication dates, and in all cases, has to devote resources to correcting and ultimately doesn’t instill trust in its investors.

Re-imagining Investor Engagement

Ultimately, having to reschedule a corporate announcement is plain embarrassing on a brand level. But it needen’t happen in the first place.

At the end of the day, asset managers have a legal obligation to ensure that these announcements are properly upheld. Automating these publications can take care of these pitfalls.

And that leads to a happier marriage.

  • By Lee Godfrey

  • October 04,2016

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