Key Mutual Fund participants opt for settlement automation via Calastone______

Calastone Limited, the independent cross-border transaction network for the mutual funds industry, announced that is has successfully developed and delivered its settlement service for mutual fund transactions.

With effect from today, fund providers, distributors and transfer agents are settling their transactions via Calastone.

In response to industry demand for a primary market settlement approach designed specifically for settling mutual fund transactions, in November 2009 Calastone announced its intention to build and launch a settlement alternative by the end of Q1 2010.

The Calastone settlement model is based on a matching engine approach, designed to calculate counterparty net settlement positions together with automated notification of legal title in fund unit positions. Currently, settlements are undertaken on a ‘many-to-many’ bilateral basis and the Calastone approach will enable firms to settle their transactions using a more efficient model.

Commenting on the announcement, Kevin Lee, Managing Director of Calastone said, “Credit for delivery of the settlement service belongs not only to Calastone’s technical team, but also to our user group of providers, distributors and transfer agents. To deliver a solution designed by the market for the market, has involved active consultation and we are indebted to all the firms who participated in scoping and testing the settlement service. We are grateful for their enthusiasm in helping us deliver an efficient primary market solution and that they are reaping the efficiency rewards from day one.”.

Dan Llewellyn, Head of Market Standards at Calastone added, “We have been convinced by our clients both in the UK and in other domiciles that settlement can be delivered more efficiently and more economically than the more outdated and cumbersome models of the past. For that very reason, Calastone has brought to market a low-cost open architecture solution. We are committed to providing a multi-domicile infrastructure from order routing through to settlement regardless of a participant’s preferred technology.”.

Alex Murton, Head of Client Administration at Schroders said, “We have been impressed with the speed with which Calastone has delivered this settlement solution. As they did in setting up the transaction network, they have listened to the requirements of various market participants and created a more efficient market model. We look forward to settling transactions with more and more participants as they connect.”.

Christopher James, Director of Institutional Services at Cofunds added, “Connecting to the settlement service couldn’t have been easier. As an existing participant of the Calastone transaction network, connecting simply involved some straightforward configuration. We look forward to reaping the benefits of settling UK transactions. We find the Calastone settlement service is a good complement to our own client offering in the Wealth Management space. It reduces our risks and has a positive influence on the additional services we provide our clients”.

Gary O’Brien, Investment Support Manager at Old Mutual Asset Managers, commented “Calastone’s bespoke settlement service brings about the automation of the entire transaction process, which has significant financial and operational advantages for our clients, as they will incur lower costs and benefit from reduced risk.”.

For media enquiries, contact:

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

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