Funds Common ground for funds data

There certainly is no shortage of information in the world these days. In almost any industry you can name, companies, customers, governments and other organizations create, share and rely on large amounts of data when doing business with each other. These volumes are only set to rise.

To handle this flood, most industries have adopted standardized data protocols of one sort or another, often implemented on a global level. Unfortunately, the mutual funds industry has not been one of them.

Repeat productions

That’s not for a lack of information in the industry.

A typical fund can easily have up to 200 fields of reference data – all the static identifying information associated with it (as opposed to share price or net asset value, which change constantly). This can include things like Fund Group Name, Umbrella Name, Fund Name, Fund Currency, ISIN, Fund Manager, Fund Domicile, and so on.

Reference data is very important for the correct distribution and management of any fund. Yet the methods used to store and share this information leave much to be desired.

Today fund providers and their distribution partners almost exclusively share this information via Excel spreadsheets sent by email, an extremely outdated way of working.

As each distributor has its own formats and conventions for receiving data, each provider generally has to create a separate spreadsheet per distributor. That’s inefficient, and leads to redundancies.

Along with duplicated effort, the process of manually creating different versions of spreadsheets is prone to error. There are also no standards for the data fields, leaving room for interpretation. That means ambiguities and the chance of more errors – errors that can be costly to fund managers, distributors and investors alike.

All together now

The good news is that, with the recent publication of the comprehensive new openfunds fund reference data standard, a solution is at hand.

The new standard is the result of two years of close collaboration led by UBS and Credit Suisse together with fundinfo AG, and in conjunction with the community of openfunds supporters. Intended to be further developed over time to include other data fields, it offers anyone in the industry an efficient, cost-free and extensible means to store and share typically used investment fund attributes.

The goal of the openfunds standard is to improve efficiency by eliminating potential sources of error and ambiguity. This should lead to increased efficiency and potential cost savings for providers and distributors. For investors it will mean increased transparency, reliability and improved ability to evaluate and compare investment funds.

Show me your ID

The new standard works by introducing unique data-IDs that provide each individual field with an unambiguous name, a description, one or more examples and reference to the data type and desired format. Thanks to this standardization, users can avoid the broad scope for interpretation and frequent misunderstandings that plague the industry today.

With the openfunds standard, providers and distributors will reap benefits even if they still send reference data in Excel format. Using the standard will also make it easier to implement more sophisticated, automated systems, for example those based on CSV or XML formats.

Worth the effort

We at UBS Fondscenter are very pleased to have been involved in this important industry effort, and to have had a hand in shaping what we believe to be an important new tool – one that should benefit all stakeholders.

We encourage everyone in the industry to take a look at openfunds and, if possible, adopt the standard. Not only does it offer many benefits, it is free to use. As a supporter of openfunds, we are also happy to answer your questions.

When it comes to reference data, thanks to openfunds our industry can finally enjoy some common ground.