Share plc, parent company of The Share Centre, has outsourced both its depository and fund accounting arrangements to BNP Paribas Securities Services, effective April 1 2013. These activities were previously carried out by the group’s investment management subsidiary Sharefunds.
The move follows a strategic review, as reported in Share plc’s interim results statement in August, of the Sharefunds business, upon which the board took the decision to concentrate the business exclusively on its existing in-house funds and to reduce its third party-related activities.
This move was in line with the group’s strategy to focus predominantly on its core retail stockbroking business and influenced by the Board’s view of the changing fund administration market place. In a statement out in December last year, Share plc said the effect of outsourcing fund accounting services means that the Group no longer has a requirement for its bespoke fund accounting system and will therefore write off approximately £0.7m of capitalized development cost in the current financial year to Dec. 31 2012. There is no impact on the cash position of the Group.
“The absence of depreciation relating to this IT system in future periods, combined with savings from reduced staffing costs and other overheads will result in a continuing relative improvement to the income statement of approximately £0.3m per annum,” said Share plc in a press release.