On Monday 26 February 2007, 195 exchange listed open-end investment funds will be transferred to the Euronext Fund Service, making investing in these funds more efficient and transparent.
The Euronext Fund Service is a joint initiative of the Dutch Fund and Asset Management Association (DUFAS), the Netherlands Bankers’ Association (NVB) and Euronext, and is based on the recommendations of the Winter Committee, which was created by the Netherlands Authority for the Financial Markets (AFM).
The new fund service aimed primarily at making investing in exchange-listed funds more efficient and transparent for investors by guaranteeing execution of all orders based on the Net Asset Value, therefore providing fair pricing. This innovative service makes the distribution and the price formation process more transparent for investors, keeping in line with European practices.
Next Monday, 195 open-end investment funds will switch to the Euronext Fund Service. The AFM will give the remaining open-ended investment funds time until 1 July 2007 to change over to the new service.
The following changes for investors as of next Monday. Orders entered in the Euronext Fund Service before 16.00 hrs. CET will be executed at 10.00 hrs. CET on the next trading day. Orders entered after 16.00 hrs. CET will not be executed the next trading day, but the trading day after that. Order execution is done at the execution price determined by the fund on the basis of its net asset value, which is published daily by fund managers. All orders are executed once a day at the same price, which makes the spread (difference between bid and offer prices) disappear.
The old trading model for open-ended investment funds will remain in place until Friday 23 February 2007. From Monday morning, 26 February onwards, orders can be entered in the new Euronext Fund Service. Orders placed before 16.00 hrs. CET on that day will be executed via the new service at 10.00 hrs. CET on Tuesday 27 February.
Trades in funds traded off-exchange in the book-entry transfer system (in Dutch: beleggersgiro) will be executed via the old model for the last time on Friday morning, 23 February, while exchange-traded funds will be traded via the old system until closing time on that day.
