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Driving risk out of the fund transaction lifecycle

Driving risk out of the fund transaction lifecycle

A chain is only as strong as its weakest link. Euroclear works to ensure that every step in the fund transaction processing lifecycle delivers the robustness and transparency customers have come to expect.

With AIFMD and UCITS V generating intense oversight for fund managers and explicit liability for custodians, the spotlight has now turned on other service providers such as transfer agents. New ‘know your customer’ (KYC) rules have increased the compliance challenges for distributors and fund managers alike, as well as put a premium on transparency in fund transaction processing. As a result, institutional investors are increasingly demanding full asset segregation.

Also, in the UK, the Financial Conduct Authority’s new Client Assets Sourcebook (CASS) rules demand heightened levels of clarity and efficiency in the movement of cash from the investor to the fund (vice-versa) and in the subsequent reconciliation of holdings.

Seamless compliance - in a segregated account structure

An effective fund processing solution has to accommodate all of these different requirements, delivering seamless compliance for its users.

Euroclear’s FundSettle International order routing-to-settlement service provides a transparent, segregated processing environment that offer participants a degree of control that is impossible to achieve in an omnibus structure. As such, it has the potential to offer an element of future-proofing – as maintaining tight control and full visibility is likely to remain central to much of the regulatory effort for some time to come.

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