New Net Settlement Service Gets First Two Clients

A net settlement service from Barclays and Calastone is now live with Smith & Williamson and Capita Asset Services selecting the service for their automated settlement of funds.

The service enables settlement finality through its centralized market cash clearing facility. Both Smith & Williamson and Capita have been using Calastone’s industry-first managed net settlement service since 2011, which is now underpinned by Barclays,

The combination of Calastone’s trade matching service and Barclays’ account structure allow for the service to settle both client money and non-client money. Currently the majority of the funds industry is settled using gross units of trading. A net service aims to reduce cashflow exposure and therefore counterparty risk.

James Gordon, director at Smith & Williamson Investment Services, said: “As Smith & Williamson were an early adopter of the net matching service we’re pleased that Calastone and Barclays have delivered the final piece of the solution. This is an important step forward for the funds industry and going live on the service will allow us to finalize automating the full trade lifecycle.”

Steve Newman, head of Product Development at Capita Asset Services said: “Signing up to the Calastone and Barclays fund settlement service will assist us in achieving reduced risk and improved efficiency. We now have a full STP solution from point of trade through to settlement.”