Pavel Prass: Outsourcing and Fund Administrators - New Opportunities for Developing Competition in the CIM

Outsourcing of the auxiliary functions of management companies and development of the fund administrator institute are the effective measures towards the promotion of competition in the collective investment market. This opinion was expressed by Pavel Prass, Director General of the INFINITUM Specialized Depository, JSC, in his speech at the Asset Management annual NAUFOR conference in March 2017.

According to him, if it is possible to register Mutual Funds for qualified investors in the name of the so-called Fund Administrator, private managers and small management companies will be able to enter the market without significant costs, which will lead to promotion of competition. The role of the Fund Administrator can be performed by a large MC or a special depository. "If, as a Fund Administrator, I am engaged in tax administration, AM CFT, accounting and reporting, it gives a right to existence of small MCs and even private managers who will deal solely and exclusively with management and attraction of investors, being only responsible for the investment result," – mentioned Pavel Prass.

He also stressed that difficult situation for many market participants associated with the increased regulatory burden, other serious changes in many processes, creates prerequisites for the development of cooperation with infrastructure organizations in the outsourcing of accounting and reporting and other auxiliary functions: "We are in favor of outsourcing with the transfer of administrative and financial responsibility from major participants to a specialized depository ".