Fund promoters aggressively entered Asian markets by establishing distribution agreements with the local banks that dominate the distribution landscape. Now the fund promoters, many of which operate their own transfer agency, are getting buried in fax orders, says William Rosensweig, managing director of Brown Brothers Harriman (Hong Kong). This is a significant problem in Taiwan, the regions largest fund distribution market of cross-border funds.
The Asia Fund Automation Consortium, founded to enhance straight-through processing in the region, has struggled to figure out a successful method of automation. Fund distribution in Taiwan is drowning under a sea of faxes. Unsurprisingly, BBH saw an opportunity for its Infomediary system, a pure technology platform. In Taiwan, banks will generate data from files in the local standard. Infomediary will transform that data into SWIFT ISO 20022, then back into the local standard, says Rosensweig.
As part of our initiative In Taiwan, banks will generate fund order data files from their internal proprietary systems which Infomediary will transform into SWIFT ISO 20022 for onward delivery to the transfer agents. The opposite will be true for confirmations which will be sent in SWIFT ISO 20022 format by the transfer agents but delivered in the required formats of the local banks with the assistance of Infomediary says Tim Connelly, BBH partner and head of Innovation and Product Services.
Connelly is keen to stress that the Infomediary platform in Taiwan will not only bring down the barriers of entry onto the SWIFT messaging platform, but also help standardize and facilitate the SWIFT messaging standard.
The Infomediary model in Taiwan is a winning proposition for the fund promoters, underlying investors and SWIFT. The only loser will be the telephone companies as the deluge of faxes is automated” says Rosensweig.
BBH has been quietly expanding into Asia, with the region now accounting for 20% of overall profits. In May this year, J. Joseph Conway, senior vice president and global head of sales for Infomediary, moved to Hong Kong, and in January Andrew J. F. Tucker, one of BBHs senior partners, moved to there to assume responsibility for Asia Pacific, retaining his existing responsibility for the firms Markets business.
BBH opened a Beijing representative office in 2009.