16/09/2014 - 14:55

WA brokers join mFund

16/09/2014 - 14:55

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Perth-based State One Stockbroking and online broking division Amscot Stockbroking are the first brokers in Western Australia to operate the ASX’s new managed fund settlement service.

WA brokers join mFund
State One Capital group executive chairman Alan Hill.

Perth-based State One Stockbroking and online broking division Amscot Stockbroking are the first brokers in Western Australia to operate the ASX’s new managed fund settlement service.

The mFund settlement service brings brokers and fund managers together, and allows unlisted managed funds to be traded as if they were listed shares.

State One and Amscot join five brokers currently using the system, with another five expected to begin operations, including Patersons Securities and online discount broker Etrade.

State One Capital group executive chairman Alan Hill said the service would simplify the process for clients wanting to invest in unlisted managed funds.

“A lot of investors are overweight in Australian equities because buying single shares overseas can be risky,” he said.

“One of the great benefits of the mFund service is diversification, particularly for those investors running their own self-managed superannuation fund.

“With nearly 60 per cent of all SMSF assets comprising Australian equities and cash/term deposits, the mFund service opens the door to easier and faster transactions in a wide range of investment options, including international equity markets and other asset classes not previously readily available to Australian investors.”

The mFund settlement service removes the paperwork previously involved with trading in unlisted managed funds, a process Mr Hills said “had been a nightmare”.

Mr Hill said the ASX had come up with similar innovations in the past, but mFund represented the most practical.

Under the service, all purchase and sell orders, payment transaction details and ownership are managed through the ASX’s clearing house electronic sub-register system, and identified using the investor’s holder identification number.

ASX head of managed investments, Ian Irvine, said the settlement service was developed to simplify the process for investors to transact in unlisted managed funds and for fund managers to provide services to direct investors.

He said the service brought a new dimension transacting for investors, with approximately 60 fund managers and 55 unlisted managed funds available as part of mFund.

“With both State One and Amscot joining the mFund service, we now have representatives in WA from both a full service and an online broker,” Mr Irvine said.

“We started with a foundation group of willing participants including fund managers, brokers and unit registries and we will start to grow around that.”

Mr Hill said he expected State One would execute the first trade tomorrow using the mFund service, after spending the past year developing systems to use the service.

The ASX launched the service in May this year and has announced an Australia-wide seminar series launching in October to educate brokers, fund managers and retail investors on mFund.

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