Calastone brings new level of automation to Contingent Deferred Sales Charge funds with introduction of CDSC solution______

Calastone, the largest global funds network, today announces the introduction of its Contingent Deferred Sales Charge (CDSC) solution for CDSC mutual funds. The new CDSC solution is built using the technology enabled by Calastone’s Distributed Market Infrastructure (DMI).

CDSC funds are known for reducing market volatility as investors are incentivised with reduced fees if they retain their investments for longer. In Taiwan alone, the number of CDSC funds has grown 98% since 2017[1] as the Financial Supervisory Commission continues to incentivise investment into these funds.

However, the benefits of CDSC funds have been typically overshadowed by the complex processes that are required to effectively administer them. Until now, asset managers have not had a digital, accurate, or real-time view of investor holding periods. Similarly, transfer agents have relied on an inefficient and costly process to collect information and accurately calculate the fee charges, as they have not had a clear view of the investment holding periods.

The Calastone CDSC solution is the first digital solution that enables asset managers with end-to-end automation by creating a shadow register of the client holdings that can be easily accessed by both asset managers and transfer agents.

This unique offering also leverages the open microservice architecture of the DMI. The solutions uses several components of its Fund Services product suite – including Connectivity, Register, and Fees, Costs & Charges.

Justin Christopher, Managing Director, Head of Asia at Calastone, said:

“Despite the benefits that CDSC funds present, the traditional model for distributing them has been very manual and expensive. Calastone CDSC is the first digital and automated solution that provides an efficient, cost effective, and scalable way for asset managers to distribute CDSC funds, and enables transfer agents to support their asset management clients more effectively at scale. The solution will enable asset managers to launch and operate CDSC funds with ease whilst reducing frictional costs and operational risk.

We are thrilled to see early adoption in Taiwan from one of our leading clients and we look forward to supporting more asset managers in Asia with launching CDSC funds in an automated and scalable way.”

[1] Source: Lipper 2023

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