Previously investors who sell or transfer units were required to give the necessary authority in writing.
Government regulations and FSA confirmation on the Investment Management Association’s industry guidance states that fund managers can now aaccept the unitholder’s authorisation by electronic means such as e-mail or through the internet site of the fund manager.
The rule change is designed to permit more automated and efficient processing of unit transfers for investors, while providing adequate protection to the fund and to individual investors against fraud.
The Government estimates that this could save UK fund managers between £70m and £290m in administration costs.
FSA director of retail policy & conduct risk Dan Waters says: “We are happy to confirm the IMA’s Industry Guidance which will help fund managers to make the move from the current cumbersome paper-based transfer system to electronic dealing and settlement without weakening protection for unitholders.”