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A-Team Insight Blogs

Talking Reference Data with Andrew Delaney: Filling the Fund Income Data Gap

In what I see as further evidence of an enhanced market focus on corporate actions and related activities, a group of asset servicing and fund administration firms have launched a London-based working group focused on fund income data. The Fund Income Data Working Group (FIDWG) is hoping to address the dearth of available information on dividend data for funds.

Barry Adams, the vice president of corporate actions at BNY Mellon who helped co-found the group with industry peers, says the idea is to create a lobby group to help educate the marketplace about the challenge of information gaps in available fund income data, and to ultimately seek a regulatory solution to the problem.

“There is a lack of transparency and standardisation right now around fund income information,” he says. “When an equity announces a dividend, it is usually in advance of ex date, and published as accessible market data. However, when it comes to fund dividends, or distributions, the availability of the data is not always as clear-cut. In some cases this distribution data is not published until some period after ex date. So, in the case of fund managers with investments in other funds, there is a potential period of time where the position may be undervalued.”

This, the group argues, is a gap in the data industry that needs to change – for the benefit of fund issuers, market intermediaries and, ultimately, investors.

According to Adams, “Our group wants to help standardise the dissemination of fund income information. At present, trying to source the data in an accurate and timely manner means tracking and directly contacting many different and varied sources. There is an opportunity to change this.”

So how do we make this happen?

“Ideally this change would be driven primarily from a regulatory perspective,” says Adams, “but there are other factors to consider. Is there an appetite to build out a central repository to house this type of data? Is there a desire from the fund management community to help drive this change? How do data vendors view this industry challenge? We don’t yet have clear answers, but we’re hoping that if we put our message out there, the market will respond.”

Sounds like an opportunity to us.

Current members of the group include representatives from asset service firms like BNP Paribas, Northern Trust, State Street and Citi. Members also include buy-side firm AXA Wealth Management, as well as trade group the Investment Management Association.

Adams says FIDWG is a formal group, with regular meetings each month and sub-groups to address specific issues. The group has established an eponymous Linked-In group and hopes to issue papers and reports as it progresses.

For us at A-Team, the launch at FIDWG is just another indication of how the corporate actions segment is heating up, in terms of standardisation and automation. Interested parties should get in touch.

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