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IFDS: new share classes are the ‘enemy’ of re-reg

Mushens-Jeffrey-Tisa-2013
Tisa technical director Jeffrey Mushens

 Fund administration firm International Financial Data Services says the proliferation of share classes in the platform industry could be the ‘enemy’ of re-registration.

Speaking at the Tax Incentivised Savings Association Exchange conference in London last week, IFDS senior technical manager Darren Porter said platforms having different share classes would pose problems for re-registration.

He said: “If you have lots of different share classes that is the enemy of re-registration. The friend of re-registration is transfer between the same share classes.

“When you have lots of different share classes as a result you end up with lots and lots of share conversions.”

HMRC announced in March that platform rebates must be taxed from 6 April forcing many platforms to consider changing their business model. A number of platforms say they will ask fund managers for preferential share classes.

This could scupper automatic re-registration as firms would have to sell down assets and buy into a different share classes when re-registering on or off a platform.

There is currently no automatic system for the conversion of share classes although Tisa is looking at how it could incorporate this into its re-registration project.

Tisa technical director Jeffrey Mushens said the organisation will liaise with the Investment Management Association to ensure it keeps up to date on the issue of preferential share classes.

He said: “We will obviously look to react as and when new share classes are launched but we are also looking to keep our finger on the pulse ahead of that.”

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