Lipper is to police the Investment Management Association (IMA), formerly Autif, fund classification...
Lipper is to police the Investment Management Association (IMA), formerly Autif, fund classification sectors from this summer onwards.
Last month, the company was contracted to monitor the asset allocation of funds in the UK All Companies sector and ensure funds are correctly classified.
Using its database of regularly updated fund information, Lipper will initially police the most popular sector, UK All Companies, before its role is expanded to include the whole funds universe.
The IMA has not yet decided whether Lipper will collate the data and send it on to IMA or sift through the wealth of information itself and inform the trade body of any offending funds.
Clare Arber, spokesperson for the IMA, said: 'It is still early days and at the moment we are discussing with our members how best to collate this information in a time-efficient way.
'We would like to have something in place by the summer but this is a moveable target.'
Arber added that upon receiving details of funds transgressing their sector specifications, IMA will inform the group in question of its misgivings and allow it a certain amount of time, based on individual circumstances, to rebalance the portfolio.
If this request is not met, IMA will move the errant fund into a correct sector that better represents its asset profile and inform all ratings agencies to follow suit.
Arber confirmed there is no set procedure in place to deal with this problem and that most offenders are caught after tip-offs from rival groups.
He added: 'It tends to only happen with very old funds that have been through various guises or name changes.'
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