Origo predicts rise in electronic in-specie clean share class transfers

by | Feb 25, 2021

Origo is predicting a shift within the industry from current largely manual transfer processes for share class conversions to electronic transfer, following the new FCA rule mandating in-specie transfer of funds between platforms.

From this month, FCA regulations (PS19/291) require platforms to offer in-specie transfers of funds, as well as share class conversions where this is required, in order for customers to more easily move between platforms and seek better value services.

Previously, investors were being penalised by bid-offer spreads incurred if forced to sell their shares and repurchase them simply to transfer between platforms that held different share classes for the same fund.

Anthony Rafferty, CEO Origo, says: “While there is no regulatory compulsion for platforms to carry out in-specie share conversion transfers electronically – email and fax are other options used – doing so is more secure, more efficient and less resource intensive for the platforms. It increases platforms’ ability to meet the industry’s service level agreements (SLAs), whilst, importantly, helping to deliver a faster outcome for the end investor.

“With rising consumer expectations of technology-driven, fast and efficient service, we envision that electronic processing will quickly become the norm for clean share class conversion and in-specie transfers.”

Origo launched its clean share class conversion and transfer capability on the Origo Transfer Service (OTS) ahead of the FCA deadline for implementation of the new rules of 1 February 2021.

This enables in-specie transfer of investors shares between platforms electronically, thereby speeding up the transfers process and improving service to investors, while complying with FCA regulation on in-specie transfers as per policy statement PS19/29.

Users of the Origo Transfer Service, which can transfer pensions, ISAs and GIAs, can now select clean share class conversion as an option when transferring funds on the service. Over 150 brands are OTS members.

1 https://www.fca.org.uk/publication/policy/ps19-29.pdf

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