Tokyo, June 7, 2017 - Nomura Research Institute, Ltd. (NRI), a leading provider of consulting services and system solutions, today announced that its back-office solution for asset management firms and trust banks, T-STAR/TX, will add service for Japan-domiciled foreign-denominated funds beginning in July 2017. The newly added service will assist asset managers with accounting and reporting.
Japanese financial institutions, especially banks, have been investing heavily in securities in recent years. In particular, they have had a keen interest in investing in funds that hold foreign-currency asset. Currently, if a financial institution wants to invest foreign-currency holdings without converting them into yen, they have to purchase a foreign-domiciled fund denominated in the foreign currency. However, nearly all Japan-domiciled funds, including those that invest predominately in foreign-denominated assets, use the yen as their base currency.
As a result, interest in Japan-domiciled foreign-denominated funds has increased due to the benefits it brings and the need for a domestically domiciled foreign-denominated investment trust. One of the benefits of Japan-domiciled foreign-denominated funds is tax advantage. A Japan-domiciled fund may be subject to a lower dividend tax rate than a foreign-domiciled fund, depending on the dividends' source country. The second benefit is that information used for risk management can be more quickly obtained from Japan-domiciled funds than from foreign funds. Thirdly, Japan-domiciled funds can be created faster than foreign funds.
By using the new service added to NRI's T-STAR/TX solution, asset managers can manage attributions of foreign funds and calculate net asset value in the same way for Japan-domiciled funds. In addition, for privately placed investment trusts (both unit type and open investment trusts), asset managers can use the solution for trust property management, accounting, legal report creation, Bank for International Settlements (BIS) reporting, and digital communication of fund look-through data. They can also use the Business Process Outsourcing (BPO) service provided by NRI Process Innovation.
Katsuhiko Fujita, Senior Managing Director of NRI, commented, "NRI is continually looking to expand our service offering to meet the needs of the changing marketplace, and the addition of our Japan-domiciled funds service to TSTAR/TX, is a testament to that. We are happy to continue to provide the most support for our asset management clients to give them a full service offering for better accounting and reporting."
The additional service is also in response to the Asia Region Fund Passport (ARFP)*1, which is expected to be launched by the end of 2017. With these industry changes in mind, NRI plans to continuously expand the functionality of T-STAR/TX to better serve asset managers.
- *1ARFP: The ARFP framework established common fund registration standards among participating countries to enable funds that comply with one participant country's standards to be easily sold in other participant countries.