First net settlement service to UK funds market goes live, delivered by Calastone and Barclays______

Smith & Williamson and Capita Asset Services go live on Calastone and Barclays’ system to automate their funds settlement process

Calastone and Barclays have gone live with the market’s first-ever net settlement service as Smith & Williamson and Capita Asset Services select the solution for their automated settlement of funds.

Both parties have been using Calastone’s industry-first managed net settlement service since 2011, which is now underpinned by Barclays, enabling settlement finality through its centralised market cash clearing facility.

Since Calastone and Barclays announced their intention to launch the first full market net settlement service solely designed for the funds industry, they have both been working with key industry participants to finalise the design and delivery.

To date, Calastone’s trade matching solution has already matched 3 million settlement instructions and the partnership with Barclays enhances the service providing earlier settlement and easier reconciliation on an intraday basis.

The Barclays account structure allows for the service to settle both client money and non-client money, future-proofing itself against any potential regulatory change.

Currently the majority of the funds industry is settled using gross units of trading. A net service introduces a significant reduction in levels of cashflow exposure and therefore reduces counterparty risk. Calastone’s intelligent messaging system allows for the automation of the cash reconciliation process.

James Gordon, Director at Smith & Williamson Investment Services, said: “As Smith & Williamson were an early adopter of the net matching service we’re pleased that Calastone and Barclays have delivered the final piece of the solution. This is an important step forward for the funds industry and going live on the service will allow us to finalise automating the full trade lifecycle.”

Steve Newman, Head of Product Development at Capita Asset Services said: “Signing up to the Calastone and Barclays fund settlement service will assist us in achieving reduced risk and improved efficiency. We now have a full STP solution from point of trade through to settlement. The benefits and the standardisation this service will give to the funds market are just a few of the reasons we chose their automated settlement solution.”

Dan Llewellyn, Managing Director, UK Sales at Calastone, said: “Since the conceptual launch of this service in 2012 we have worked closely with the industry to bring this product to market. Delivering what we promised to the industry in such a short time period is a great moment for both Calastone and Barclays.”

Bill Wrest, Director at Barclays Corporate Banking, said: “This solution brings to the market increased transparency and significant benefits in both cost and risk reduction to the funds industry. We’re delighted to bring both Smith & Williamson and Capita live on full settlement solution, and believe this is the precursor to many more moving to the market leading settlement process.”

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Julia Streets / Abby Munson
Streets Consulting
+44 (0)20 7959 2235

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