intermediaries can purchase isas direct from any providers signed up to service
Intermediaries using Emx will soon be able to purchase Isas online direct from any provider signed up to the service now that Emxco has come to an agreement with the Inland Revenue.
The Inland Revenue's interpretation of the law governing the transaction of Isas had always prevented the straight through processing of Isa business via Emx as it is not a product provider.
Fund supermarkets, and those product providers which offer online services, have been able to transact Isas online since the launch of the product. However, when the processing is done via Emx, which is unlike a supermarket in that it only offers a communication channel not an actual product, the Inland Revenue applied different rules. These required that the applications and payment authorisation are passed simultaneously on to the product provider.
Phil Wise, chief executive officer of EmxCo, said Emx is now at a point where it can move away from the necessity of receiving cheques with applications before a transaction can be completed. He added: 'We are in a position now that product providers receiving the order from intermediaries with their clients account numbers can use their debit cards and this will count as being cash with the order. The principle of that has been accepted by the Revenue.'
The consultation papers EmxCo sent out last month have now been received back and a more detailed timescale for developments will be released in the New Year.
Wise said the initial thrust will be ensuring that the different electronic protocols used by product providers and intermediaries respectively will be able to communicate through Emx. Portals could play a big part in this, Wise said. While fund management groups use the electronic protocol, Fix, intermediaries are increasingly keen on XML.
Wise said: 'The development of an XML interface for the intermediary side is a priority and we will be seeking quotes from an internet service provider in the new year.'
Wise added Emxco is keen to balance the need of intermediaries and product providers and, given the high cost of either side switching to the other's protocol, the XML translator, linking the services, is a favourable option.
Intermediary portals could potentially benefit from Emx's incorporation of XML into its fund messaging system. Wise noted that a number of portals and larger players in the intermediary market, including Assureweb and Inter-Alliance, use the XML computer language. They could potentially link up with Emx to enable smaller intermediaries to gain access to the system without having to invest in any new technology.
Although a deal between Emxco and any of the portals is still a long way off, it could lead to intermediaries transacting with product providers directly through the portals.
The integration of XML into Emx also brings up the possibility of opening up the service to the life and pensions industry, which currently uses the XML-based Orego standard.
Emxco is also eyeing up the offshore market. The group is in the process of changing the initial agreement with shareholders that Emx only be used for onshore products.
While all shareholders have agreed to the move, which would target offshore platforms, such as life wrapped multi-manager propositions, only around half have signed the agreement as of yet.
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