The regulator is to meet members of Tisa to discuss re-registration rules next month, with the trade body reiterating to platforms best practice guidelines when dealing with super clean share classes after issues arose recently.
Investment Week can reveal the Financial Conduct Authority has contacted Tisa in the last few weeks following fresh concerns over re-reg caused by super clean share classes.
Investment Week recently highlighted the case of a wealth adviser who was struggling to move his client from Cofunds to Transact because of complications with the client's holdings in new, super clean share classes.
Murdoch Asset Management director Tony Dunne tried to re-register the client, but said he was left with the choice of leaving the super clean portion of the client's portfolio on Cofunds, or selling out of the fund and moving the holdings over in cash.
He could not re-reg because Transact did not have the same preferential share class to which Cofunds had access. A sale of the holdings would have potentially exposed the client to a capital gains tax bill.
At the time Tisa said Cofunds, as the platform with the super clean share class, had responsibility to convert it to a standard share class, reiterating the good practice agreed by the industry which was announced in May.
In most cases, the acquiring platform is responsible for the transfer. However, in the case of super clean share classes where there is no equivalent on the acquiring platform, the ceding platform must transfer the investor to a mutually compatible share class.
Now, following Dunne's case, Tisa has sent a formal reminder to platforms of their duties when re-registering clients.
Tisa technical director Jeffrey Mushens, chair David Moffat and deputy chair of platforms and wraps Stuart Wright will also meet the regulator next month to reiterate its policy.
Mushens said the reaction to the reminder has been positive: “People do make mistakes, but we have reminded members and people did sign up to this.”
Super clean share classes provide particular challenges to re-reg, because platforms look to hold as few share classes of a fund where possible, in order to keep costs down.
Mushens said fund managers and platforms had all signed up to the rules, and the time taken to move between platforms has dropped significantly over the course of the year.
Dunne's situation has also been resolved, with the adviser this week receiving confirmation Cofunds will convert the fund into a mutually compatible share class, allowing it to be transferred to Transact.
