The launch of a raft of different preferential share classes will be a hurdle to re-registration and add costs to the process with automatic re-reg between different share classes two years away, according to experts.
Speaking at the Money Marketing re-registration round table last week, International Financial Data Services group executive David Moffat said there was still a lot of work to be done to develop the appropriate technology to facilitate a simultaneous assets transfer and share class conversion.
In March, HM Revenue & Customs announced unwrapped platform rebates would be taxed from 6 April which has prompted many platforms to add clean share classes.
Standard Life announced last week it had secured preferential share class deals with 15 fund managers and rivals are also looking to secure deals. But the fund transfer industry says proliferation of share classes poses problems for re-reg.
Moffat said: “There is a whole load of work to be done to make this kind of thing work automatically. Currently the re-registration and share class conversion cannot be completed at the same time. An automatic transfer of this kind is still 18 months or two years down the line.
“Even then it will be a slow accretion of firms taking it up it will not be an immediate industry adoption.”
He added the main focus at the moment was to ensure platforms had the capability to transfer assets into clean share classes within the same platform.
Calastone said the process of transferring assets within different share classes would also come at an increased expense.
UK sales executive director Phil Goffin said: “Yes it is definitely more expensive and will take more time to do although it is difficult to quantify the extra cost because it is an ongoing technology expense.”