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Acta Holding ASA (OSL:ACTA) Acta has experienced a challenging second quarter in 2008 in more way than one. Norway has seen a far greater focus on investment advisors in the aftermath of the introduction of MiFID and the Norwegian FSA's new interpretations of the directive. Acta, being this market's biggest and most significant exponent, has had significant exposure in the media. Additionally, insider trading charges raised against a former board member and co-founder have impacted operations negatively.
- Acta is closely monitoring the altered external conditions and signals from the regulatory authority, and we have taken several initiatives to meet these new requirements. Acta has already introduced several measures, and still more measures are planned for third quarter, in order to improve the quality of our advisory services and our fee structure, as well as information to clients regarding fees. Acta is dependent on the confidence of both clients and the regulatory authority to remain the preferred supplier of financial advice in the retail market, says CEO Simen Mørdre.
Fundamental changes to products and services * Mandatory advise to (small and moderate) investors to hold at least 25% of their investment portfolio in bonds and money market instruments * Warrants and debt financing of index linked bonds no longer offered and not offer advice regarding loans with collateral in securities * Stricter policies in the advisory services organisation * Clearer separation between Acta Kapitalforvaltning ASA and Acta Asset Management ASA * Fee levels more independent of the investment vehicle * More emphasis on management and performance fees, rather than sales and up-front commissions * Better information on product fees * Greater independence for compliance and a clearer chain of command
As part of a general inspection of financial advisory companies in Norway, the Financial Supervisory Authority of Norway has indicated that it will conduct an ordinary inspection of Acta's operations. The company expects this inspection to take place at the end of the third quarter this year.
- The Financial Supervisory Authority has visited us on several occasions before, and we have always acted in accordance with their instructions and interpretation of the current regulations. Acta has implemented all the new requirements following MiFID, and it has strengthened its compliance activities and functions to ensure that the group operates within the current laws and regulations at any given time. All of the products offered have always been competitively priced and information has been consistent with all the relevant requirements, says Mørdre.
Financial Highlights in 2nd quarter 2008 * Weaker financial markets led to gross subscriptions of NOK 3,395 million, compared with NOK 6,729 million for the same period in 2007 * Revenues of NOK 320 million, compared with NOK 599 million for the same period in 2007 * Recurring revenues of NOK 75 million, with a coverage factor to fixed costs of 66% * Operating earnings of NOK 86 million, compared with NOK 271 million for the corresponding quarter in 2007 * Assets under management of NOK 90 billion, up 15% from NOK 78 billion at the end of June 2007 * The Group is solid and has a good liquidity position of more than NOK 450 million after a dividend of NOK 642 million for the 2007 financial year was paid in May * Successful first share issue in US Opportunities of more than NOK 1 billion; the highest first share issue ever irrespective of asset class * Operations in Sweden remain strong and stable
A complete English version of the interim report and the presentation of the 2nd quarter of 2008 are attached on www.newsweb.no and on Acta`s Investor Relation web pages www.acta.no.
