The ASX launched its ‘AQUA’ listing service for managed funds and ETFs last week, amid hopes the financial turmoil would eventually reward more liquid and transparent structures, and prompt issuers to pay the bourse as much as 3.5 bps of FUM to house products.
The ASX’s general manager of equity markets, Richard Murphy, said that while it might seem a bad time to be launching any financial services initiative, the pricing certainty delivered to investors by an ASX-traded managed fund could be highly prized in a volatile market environment.
Whereas the unlisted managed fund environment can be notorious for extended lags between fund application and initial strike price, or delays of up to 30 days in accessing cash on the way out, Murphy said ASX’s CHESS sub-register and settlement system ensured three-day (T+3) settlement.
He outlined other benefits to managed fund or ETF vendors as increased visibility and distribution, greater admin efficiency through CHESS, and easier access for international product issuers provided they can find a local sponsor able to comply with AQUA’s listing rules.
The ASX stands to do very well if AQUA takes off – it will charge a one-off fee of $15,000 for each new issuer under the rules, and $2000 for each new fund.
After that, there is an annual fee of 3.5 bps of FUM for funds under $100 million, rising to $385,000 plus 0.75 bps of FUM for a fund holding more than $2 billion.
However there are aggregated fee schedules for issuers of between five and nine AQUA entities, and a more attractive schedule for issuers of 10 or more vehicles under the AQUA rules.
The issuers of the first 100 AQUA products will also receive ipod ‘Shuffles’ in an introductory promotion announced at last week’s launch.