The Australian Securities Exchange (ASX) is to launch a new managed funds settlement service to be called mFund Settlement. ASX has received regulatory clearance to launch it during the first half of 2014.
Self-managed superannuation funds currently account for more than A$500 billion in funds under management in Australia. ASX has developed mFund for investors, brokers and fund managers in order to improve settlement speeds and to cut costs of investing in managed funds.
It will replace paper-based processes and use the CHESS electronic system for settling and finalising ASX share transactions, which will automate and track the process of transactions and eliminate paperwork.
mFund will allow investors to use an ASX broker when they buy and sell units in unlisted managed funds. Products will be unlisted and are not traded between investors on the market, but will be settled directly with fund managers via CHESS.
Via the CHESS infrastructure, investors will receive a report that summarises their holdings in shares, managed funds, bonds and ETFs purchased using the service. A number of mFund unlisted managed funds will be admitted to ASX.