SIX Securities Services – the Swiss international post-trade services provider– and Euroclear Bank – the international securities services depository – have formed an initiative to jointly provide fund services to Swiss investors.
Under the cooperation agreement, SIX and Euroclear are delivering by bringing together order routing and unit settlement on a single platform for all types of fund transactions. This is intended to help clients benefit from enhanced service quality and processing efficiencies. The initiative also covers the provision of integrated reporting for all asset classes are on offer in this one-stop-shop approach.
The concept follows an analysis over the past few years of the changes in regulation, technology and competition, explains Dominic Kamm, director of Custody and Funds offering at SIX.
“The clients, particularly Swiss banks, approved it and they see it as a real value add.”
Mutual clients will benefit from market proximity, with SIX covering primarily Swiss market securities and clients, combined with Euroclear’s global network of over 500 Transfer Agents.
SIX will focus on providing services to the Swiss market, backed by Euroclear’s FundSettle service for the connectivity and execution towards the different funds.
This cooperation initiative is also intended to deliver significant cost savings through processing standardization and the reduction of risk through the straight-through processing of transactions, says a joint statement. The option to open segregated accounts is also possible.
Lieven Libbrecht, senior director, Funds Product Management, Euroclear notes that with Switzerland being one of the leading centers for wealth management, the customers there have specific demands in terms of the services they require. Those services need to be continually updated, he adds.
“The new regulations require service providers to rethink their service offering, including key aspects like account segregation. We are now also in a world where the investors are using a broad range of instruments to meet their investment needs and strategies. What is being provided here with SIX is a single one-stop shop for clients, from plain vanilla mutual over index-tracking instruments like ETFs to hedge funds. Our FundSettle service combines the broad technological capabilities, the extensive fund expertise of our staff and the large network and fund coverage to greatly improve transaction processing efficiency – and ultimately drive down costs.
“It is an exciting market in which to up your game and provide improved services. These services include reporting and segregated accounts.”
The co-operation initiative is going live with an intermediary client solution at the beginning of February 2015, says Kamm.
Kamm: “We are excited about this partnership and the service quality we expect to provide. Of course, if there are other opportunities that present themselves for further partnerships we will definitely consider them.”
Libbrecht says Euroclear is open to explore similar partnerships and extend to other markets with local market infrastructures.
SIX and Euroclear in Fund Services Co-operation Initiative
SIX Securities Services – the Swiss international post-trade services provider– and Euroclear Bank – the international securities services depository – have formed an initiative to jointly provide fund services to Swiss investors.