ATP, Denmark’s largest pension-scheme administrator, has chosen Euroclear’s FundSettle as its pan-European processing platform for all non-Danish fund transactions, as part of its new special savings scheme.
Folkeboersen (People’s Exchange) goes live on 1 January 2005 and will be funded by means of a contribution equivalent to 1% of the annual salary of those among the country’s 3.3 million employees that opt to invest in it. Folkeboersen replaces an existing special savings scheme called SP, which at the end of 2003 was valued at EUR 5.8 billion (DKr 43 billion).
Managed and administered by ATP, the new scheme aims to give Danish employees greater influence in the investment and management of their pension capital by allowing them to choose where that capital will be invested.
A new web portal will allow Folkeboersen members to make their investment choices directly. Subscription and redemption instructions for international funds received via the portal will be pooled by ATP and sent directly to FundSettle, which will ensure full order-routing to the relevant funds and the settlement of all transactions. Cash settlement and custody services will be provided by ATP’s custodian bank, Nordea Bank Copenhagen.
The provision of a fully automated and standardised processing service means that this new FundSettle offering will be of particular interest to custodian banks, which have, until now, tended to steer clear of the investment-fund sector due to its high levels of manual intervention and attendant costs and inefficiencies.
Speaking in Monaco today on the occasion of the 14th annual Fund Forum, Thierry Logier, Director, Product Management – Investment Funds, Euroclear, commented: “We are very happy to be working with ATP on this exciting project. Their selection of FundSettle sends a powerful message to fund promoters throughout Europe that our platform represents the optimum solution for the processing of cross-border fund transactions today.”
Bjarne Graven Larsen, Chief Investment Officer, ATP, added: “By providing a high-quality and efficient service at minimum cost, FundSettle represents a close fit with ATP’s own core values. Keeping a tight rein on administration costs is the key both to maximising consumer choice in the selection of investment managers and to creating an international marketplace in Denmark for collective investment schemes.”
ATP is the independent administrator of Denmark’s Labour Market Supplementary Pension Scheme. Assets under management of around EUR 40 billion (DKr 300 billion) make ATP one of Europe’s largest pension-fund administrators.