ASX-listed portfolio administration provider Praemium has won approval from the United Kingdom financial services industry regulator for the legal framework it has pioneered for a new variation on the separately managed account (SMA).
According to Praemium, the hybrid SMA/managed fund offering, to be known as Smartfund, incorporates a unique legal structure that enables clients to take advantage of UK tax benefits for managed funds.
Praemium group managing director Arthur Naoumidis described achieving Financial Services Authority (FSA) approval as a major milestone in the company’s UK expansion plans.
“This approval is the result of a significant amount of work undertaken to ensure the UK adaptation of the SMA suits the local distribution dynamics as well as the regulatory and taxation environment [and] means we are now ready to deliver [it] to interested financial institutions and intermediaries.”
Naoumidis said Smartfund has the transparency and investment experience of a typical SMA as well as the tax benefits of a UK-managed fund.
He said deploying the SMA within a unitised managed fund structure also means UK-based advisers will be able to discuss Smartfund with clients without changes to their licensing.
Smartfund, which will run on the company’s portfolio administration platform, is already gaining traction in the UK market, according to Naoumidis.
“We already power the systems of two of the world’s leading SMA providers and have started work with foundation client partners in the UK, such as Capita and Cofunds. We know from the feedback received already that the service will really appeal to British IFAs and the general public alike.”