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IFDS is first to use Euroclear UK & Ireland’s upgraded fund services

BNP Paribas Securities Services and IFDS client M&G Investments kick off the service

International Financial Data Services (IFDS), a leading international transfer agency service provider, is championing the recently upgraded investment fund processing services of Euroclear UK & Ireland (EUI). IFDS client M&G Investments and BNP Paribas Securities Services as distributor are the first to use EUI’s new electronic ‘orderthrough-to-settlement’ service, which includes cash and custody processing.

IFDS is responsible for supporting 40 financial organisations manage their assets worth in excess of GBP 477 billion (EUR 560 billion). By availing itself of EUI’s full service offering, the IFDS fund management community can expect to reduce substantially the costs and risks of fund processing while benefitting from greater operational efficiencies through the comprehensive nature of EUI’s service.

EUI’s investment fund processing service is unique in that it is the only UK provider that offers such an extensive range of integrated post-trade services for investment funds. Clients can:

• electronically route orders for UK investment funds;

• automate fund unit settlement for subscriptions and redemptions;

• link cash movements derived from units bought and sold;

• reconcile stock and cash balances on a real-time basis;

• distribute and receive corporate action proceeds; and

• where applicable, provide seamless re-registrations and transfers of client portfolios.

John Trundle, Chief Executive Officer of Euroclear UK & Ireland, commented: “Together with IFDS, we are delighted to offer a much sought after solution for the fund industry – a single point of access for all investment fund transaction needs. As the UK and Ireland’s central securities depository, we are the provider of proven, automated, highly secure and reliable services for the institutional and retail markets.”

Trundle continued: “Fund transactions settle with us on a delivery-versuspayment basis, meaning that cash and fund units are exchanged electronically and simultaneously. Full processing automation avoids major human processing errors. Moreover, we are pleased to offer a comprehensive and evolving range of related services to clients. For example, we recently introduced a centralised way to transfer funds, which will help ease substantially the laborious and risky re-registration process.” Richard Barrett, Director of Operations at IFDS, said: “We are committed to supporting our clients’ aspirations to improve order routing and settlement. At IFDS we are proud to be the first service provider to support this new fund settlement service, and we believe this evolution will be of benefit to the fund industry.

Laurence Mumford, Retail Chief Operating Officer, at M&G said: “At M&G we pride ourselves on innovation and working with suppliers to give our clients improved services. EUI’s new fund settlement service is a pivotal step towards increased efficiency in the post-trade services for investment funds and we are delighted to provide this increased ability to our UK clients.”

James McAleenan, Head of the UK for BNP Paribas Securities Services, said: “We are delighted to be the pilot custodian on such an innovative project, which will no doubt enhance the post-trade services industry. We firmly believe that this initiative will improve efficiency, in particular regarding better use of liquidity and optimising payment processes, which are two of the biggest challenges today.”

Investment houses availing themselves of the enhanced range of investment fund services will see large cost savings and reductions in operational and counterparty risks. Trade-to-settlement cycles can be shortened by up to 60%, or typically to four business days after the trade is struck compared with up to 10 business days today. HM Treasury estimates that the UK fund industry could save between GBP 70 and GBP 290 million (EUR 80 – 315 million) per year by automating fund transaction processing and promoting real-time reconciliation.