Currently it is free for investment firms, who fulfil basic regulatory requirements, to register funds on the system. There is, however, an upper limit of 25 funds per manager.

“In the end I think we will introduce an annual fee for funds to participate in the system,” said Mr Barr. “Only then will we see a fall in the number of choices available.”

In April 2007 a new fee structure was introduced with the aim of reducing costs for the end investor. The many funds without any capital invested were, however, unaffected by the fee changes.

“The aim of the new fee structure was to reduce the growth in the number of funds listed rather than reducing the number of options available,” said Mr Barr.

“And that has happened. Year on year the number of funds being listed has grown by around 100 but this year growth has remained flat – I think there are even 10 less funds listed at the moment compared to this time last year.”

Managers have to give part of the investment fees they collect from savers back to the PPM, which are then returned to investors. On 1 April this amount increased. On average, the new model reduces costs for savers from 0.4 per cent to 0.3 per cent of the managed capital. The way fees were calculated also changed to take into account the total assets a manager has listed on the system rather than the assets it has in each of its individual funds. CN

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