Electronic dealing for Institutional Investors: Schroders' solution

In order to diversify risk while trying to maximise returns from an investment portfolio, it is necessary to spread investments across a number of investment vehicles. Such diversification can be expensive and inefficient if the Investor does not make use of automated administrative facilities. Traditionally, Institutional Investors deal in funds by faxing their orders to the scheme’s management company. The management company then executes the deal and advises the investor of the transaction details. Naturally, for the Institutional Investor, this process is administratively time consuming while there is always the risk of mistakes due to human error.

As a result of Schroders vast experience in the field of automated administration, Institutional Investors in our funds can now take advantage of the enormous benefits offered by Straight-Through Processing (STP), as an alternative to the traditional dealing methods, with no additional dealing fee. On each business day, prior to the trade cut-off time (presently 15:00 CET) Institutional Investors can deal electronically by using one of the following techniques:

• By establishing a dial-up or Internet "client to host" password-protected connection to a dedicated location on one of our servers, where dealing electronic files are transmitted by File Transfer Protocol; or,
• By inputting orders into a third party dealing platform*. These platforms then exchange dealing messages with our server via the SWIFT network.

By using the most recent information technology, the preparation, transmission, execution and confirmation of transactions can be completed with the minimum of manual intervention. Schroders use an electronic interface that imports the electronic files containing orders. This system then checks the deal format and books them in our shareholder register. On the following day, our system issues electronic files containing the confirmations of all deals placed the day before. Institutional Investors upload these files with one of the above mentioned techniques and use them to register their deals automatically. .

As an additional service, on a daily basis we can make available to Institutional Investors, an electronic file (see example and description) containing the list of the Net Asset Values of all our Luxembourg based funds.

* At the moment Schroders are participating in the following systems: SWIFT, FUNDSETTLE by Euroclear and VESTIMA by Clearstream. For any other information system, please refer to operating platform providers.