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In 2009 the Fund Stocks and Flows Group focused mainly on improving the security and efficiency of the order placing process in a rapidly changing environment. The situation in financial markets, the collapse of Lehman, the Madoff fraud and future regulatory changes including UCITS IV, the AIFM Directive and the debate over the roles and responsibilities of depositaries have had a considerable impact on the liability management profession, and will continue to do so.

With this in mind, the Fund Stocks and Flows group has taken part in official working groups, together with the AMF and the AFG, on overhauling the AMF’s General Regulation on liability management.

Among the topics addressed in 2009 were the roles and responsibilities of the transfer agent and issueraccount keeper, aspects relating to delegation, direct orders and the principal’s irrevocable commitment. These discussions will provide input for a draft text submitted for consultation by the AMF in the course of 2010.

As well as supporting the stabilisation and ramp-up of the fund order routing platform, the group also endeavoured to complete its code of practice for transfer agents and to publish the second part, as announced in 2008, covering in particular specific funds and orders as well as foreign funds.

A detailed analysis of amount-based orders was also conducted in the final quarter of 2009, with the aim of reaching a consensus between principals and transfer agents on a set of best practices, including the formula used to calculate quantities.

These best practices will be published in a third version of the charter due out in the first half of 2010. In addition, the AFTI Fund Stocks and Flows Group continued its work on the “TA Light” convergence model by structuring it and positioning it in a Franco-Luxembourg environment.

It also created new cross-cutting working sub-groups: a technical sub-group to further improve order marking and a legislation-oriented sub-group on roles and responsibilities in relation to order reception and transmission for funds. The group also continued to play a part in responding to various French and European consultations where these had a bearing on transfer agents and principals.