The art of common sense SKAGEN funds Questions related to fund settlement in T2S

Transcription

1 The art of common sense SKAGEN funds Questions related to fund settlement in T2S SKAGEN Funds Stavanger,

2 Who is SKAGEN funds? Norwegian, partner owned, investment management company. Established in employees. Main office in Stavanger, 5 branch offices in Norway, in addition to Stockholm, Gothenburg, Copenhagen and London Manages in total 10 mutual funds under the SKAGEN Funds brand name, but only markets eight of these outside of Norway Approximately NOK 103 billion (around EUR 12 billion) under management and direct clients Leading equity fund management company in Norway Licensed to market funds in Norway, and cross border in Denmark, Sweden, Luxembourg, the Netherlands, Iceland, United Kingdom and Finland. Facts about the funds: Ucits-funds; issuer-csd is the Norwegian Central Securities Depository: VPS (Verdipapirsentralen ASA) One ISIN code per fund Offer trading in NOK, EUR, SEK, DKK, CHF, USD and GBP.

3 Our prospects for T2S (as we understand it) Improved infrastructure Easier access to a wider audience for SKAGEN More convenient trading for our existing European clients Swifter settlement for our clients Reduced transaction cost for our clients Facilitate the experience of SKAGEN as a local player At lot of the thinking in T2S coincides with the thinking in UCITS But we have some questions

4 Questions (1) Related to the criteria for a paper to be included in T2S Is it correct that the criteria for a fund to be included in T2S are the following? 1. Have an ISIN 2. Are held with a CSD connected to T2S 3. Settle in book entry form (settlement as for shares) 4. Are fungible (Some of our questions are somewhat connected to criterion number 3.)

5 Questions (2) Related to the eligibility principles of CSDs for T2S Based on proposition from ECB, CSDs have to make any ISIN issued available to other CSDs if an enquiry is made. Will this apply to funds? To be in accordance with Norwegian law the investor-csd have to report information on all end-investors who are Norwegian tax subjects to the Issuer-CSD (VPS), who in turn shall report to the Norwegian tax authorities. How will T2S facilitate this? How will we be certain that it is handled?

6 Questions (3) Related to the eligibility principles of CSDs for T2S Who are responsible for where (which countries) the funds are made available? We can not violate missing marketing approvals. What are the roles of the different parties in the process of making an ISIN available at other CSDs than the issuer CSD? (client, client s contact, fund management company, issuer-csd, investor-csd) Can funds registered at issuer-csds that do not sign up for T2S still be settled in T2S?

7 Questions (4) Related to NCB accounts Is it the management company or the fund s custodian bank who shall have accounts with NCB(s)? As our funds offer settlement in different currencies; does this mean that accounts with several NCBs are needed?

8 Questions (5) Related to payments for subscriptions Net in- or outflow is used in NAV calculation (swing pricing), this means that we need sufficient security that payment will be done to avoid errors in the NAV. This is also regulated by Norwegian law. We need a guarantee that payment will be done (or money received on the fund s account) to be able to issue units. What is the best way to do settlement in T2S do avoid errors in the NAV and be in accordance with the law? Can the system (for instance the Auto Collateralisation on flow) be transformed to 100% security for payments for fund subscriptions? Will T2S address this issue with Norwegian (and other countries ) authorities?

9 Questions (6) Related to distribution of taxable income The taxable income in our fixed income funds is distributed as issuance of new units (on a yearly basis). How will this work in T2S? How is the client s holdings in the investor-csd updated and who is responsible for this? What/Who regulates how this is communicated to the clients? (Funds article of association, fund management company, issuer-csd, investor-csd?)

10 Questions (7) Other questions Our funds have one ISIN but we offer settlement in different currencies. How will this be handled? All CSDs connecting to T2S shall have the same calendar of opening days and harmonised opening and closing times; how does this affect possible trade days?

11 Questions (8) To summarize What does the exact flow of money and units look like, for funds in T2S? (Movements between accounts, timing etc.) Which questions have we forgot to ask?

12 Thank you for your attention!