How the fund industry is using and disseminating EPTs is a good example of the continuing need for operational efficiency

Maxime Aerts, Chief Operating Officer, Fundsquare

Maxime Aerts

COO, Fundsquare

At the beginning of this year, the PRIIPS rules went live. To help standardise the necessary data exchanges between the various fund industry actors, the European Fund and Asset Management Association (ESMA) encouraged the use of EPTs (European PRIIPs Templates).

Six months later and with over 225,000 EPTs collected and disseminated by Fundsquare, what are the main trends we have seen so far? What conclusions can be drawn from EPT use?

As a purely voluntary template for the fund industry, there are some interesting insights.

Automate as much as possible

Initially, and perhaps surprisingly considering the first version of the EPT was published in July 2017, there were numerous requests for clarification. In order to generate EPT files according to their final use (the production of a PRIIPS KID), there was quite a lot of information exchange on how to understand or interpret the standards.

Distribution of EPTs per reference date

As for data quality in the EPT, this followed a familiar pattern. The start-up phase saw the need for manual correction and intervention, but such incidences were gradually reduced as management companies adapted to what was needed. Data quality has constantly improved.

This pattern is important for the future of the fund industry and can be seen as a three-stage process.

Firstly, improve data quality, secondly focus on automation of data production and exchange and thirdly enable human intervention to focus on value-added services.This third stage is where the industry needs to be.

Insights in the figures

Looking at the figures, which currently cover EPTs for more than 39,000 unique ISINs, we see some interesting points.

Number of EPT on PRIIPs data hub

A significant number of UCITS management companies have opted for the light version of the EPT, which they can do until the end of 2019.

69% of portfolio issuers have so far published only one version of their EPT, while 2% have published 5 versions or more. It is still early days for the EPT and it remains to be seen how these figures will look at year end.

EPTs can be disseminated monthly or quarterly, either only in the months or quarters when the figures change or every month or quarter. In the majority of cases, files are sent to Fundsquare on a monthly basis although we observe very few changes between one file and the other

As for file formats, despite the use of formats such as XML being allowed, around 80% are in CSV and 20% in XLS. No other formats are seen.

The narrative fields in the template are proving to be slightly problematic. Some have a maximum character count, which can be a challenge when translating to another language. 16% of EPTs have no narratives at all and when narratives are provided, English is the most commonly used language (50%) followed by French (19%) and German (8%).

Also, a few fields still allow for a certain degree of interpretation and it is expected that they will be modified in the future.

Overall, the EPT rollout has been relatively painless but improvements can be made.

It is pleasing to see that, with the need to lower costs and improve operational efficiency, the efficacy of data management systems has come to the fore. In the long term, this will benefit both asset managers and investors.

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