Eleven new members will join the Central Facility for Funds (CFF), Clearstream’s new post-trade solution for investment funds domiciled in Luxembourg, Europe’s largest market for international funds. The new members are Nordea Bank SA, JP Morgan, UBS Fund Services, BNP Paribas Luxembourg, European Fund Services (EFS), Fasnet, Alliance Bernstein, ING, Banque de Luxembourg, Hauck & Aufhauser Luxembourg and Equity Trust Luxembourg.
The new arrivals will be phased in between the end of September and the end of the year. The investment fund shares handled by these banks will be transferred onto the new platform which provides delivery-versus-payment (DVP) settlement services based on the exchange of cash and securities between fund distributors and transfer agents.
The eleven firms join Schroder Investment Management (Luxembourg) and Pictet & Cie (Europe), which were the first to pilot CFF when it was launched last March. CFF is open to all Luxembourg transfer agents as well as transfer agents from other markets dealing in Luxembourg-domiciled funds.
According to a study by Deloitte, a consultancy, the cross border investment funds industry could save 30 percent of processing costs and gain over £250 million by streamlining trading, settlement and custody of cross border mutual funds distribution.
Clearstream designed CFF as an answer to growing market demand in Europe and Luxembourg. Several significant market participants including distributors, promoters, transfer agents and trade associations in Europe and Luxembourg were consulted by Clearstream and contributed to the design of the CFF concept.