Full automation of daily unit reconciliation, further changing market infrastructure
Capita Financial Group Limited has today signed an agreement to use Calastone’s daily reconciliation service for asset management transactions.
Capita, market leader in providing ACD services, works with Calastone, the indepdendent cross-border transaction network for the mutual fund industry, to offer straight-through-processing for fund dealing, providing a real-time order management process for its investment manager clients. Capita is an exisiting user of Calastone’s order routing and settlement services. Adopting Calastone’s daily reconciliation services Capita is further changing market infrastructure by improving connected systems to deliver an improved service to clients and fund distributors.
For many years, regulation has required distributors to undertake monthly reconciliations to guarantee full accountability and surety of funds held on behalf of clients. In addition, fund managers (or their Transfer Agents) are legally obliged to hold the legal record of title in the UK, and equivalent rules apply in other territories.
Calastone’s daily reconciliation service, launched in Q1 this year and now expanding rapidly, offers a significant opportunity for distributors to reduce their risks. In an industry that is coming under increasing pressure mutual fund participants will need to move to daily reconciliations if advances in automated re-registration are to be achieved.
Commenting on the launch of the service, Ian Taylor, Chief Executive Officer for Calastone, said: “We are delighted that Capita has elected to use our daily service. It proves to us that there is a demand for increased transparency over reconciliations which include daily holding and transactional information. The mutual fund industry is undergoing some of the most transformational changes in over a decade and Calastone strives to identify ways to help the industry overcome its challenges.”
Chris Addenbrooke, chief executive officer of Capita, added: “Providing a daily reconciliation service will improve the facility we offer our clients, enabling them to reconcile their position on a daily, rather than monthly, basis. By working with Calastone to gage market feedback, we have decided to further offer a daily group 1-2 split of holdings. We believe this will help us provide an improved service for our clients and therefore fulfilling the needs of ever ongoing changes in both domestic and European regulation.”
Capita Financial Group is a wholly owned subsidiary of Capita Plc, a FTSE 100 company. It has 600 employees in the UK and Ireland, servicing around 500 funds with over £30bn assets under administration. The operation in Ireland was established in March 2006 and specialises in providing fund administration solutions to investment managers investing in traditional and alternative investment assets around the world.
Calastone is the independent cross-border transaction network for the mutual fund industry.
Calastone was established in March 2007 by three joint-founders, Campbell Brierley (Chief Information Officer), Kevin Lee and Ian Taylor (Chief Executive Officer). From industry experience they recognised that, unlike the institutional market, communications in the mutual fund industry between the fund providers, distributors and their transfer agents was nothing short of archaic. Messaging is still conducted by phone, fax, email, and excel spreadsheet; and the industry has been lacking a transaction network capable of handling and interpreting instructions.
Calastone presents, for the first time, the opportunity for the whole mutual fund market to become fully electronic. The magic of the Calastone Transaction Network (CTN) is that participants are able to send/receive instructions in any way they prefer whatever their messaging protocol. Also, for the first time, participants can track their trades and manage exceptions on a real-time electronic basis throughout the transaction lifecycle. Real-time tracking through Calastone’s execution management system helps firms reduce not only their costs but also operating risks.
Capita press office
Tel: +44 207 654 2152 or +44 207 654 2399 (out of hours)
Julia Streets / Abby Munson
Tel: 0044 20 7959 2235
20 June 2012