The investment funds industry could save 25 percent of processing costs and gain over 250 million by streamlining trading, settlement and custody of cross border mutual funds distribution. This is the result of a study by Deloitte in partnership with Clearstream, the international central securities depository within the Deutsche Boerse Group, released at Fund Forum this week in Monaco.
Additionally, with Basel II standards coming into effect in 2008, industry participants such as transfer agents and distributors would also save approximately 20 percent of regulatory capital required to run their business. This translates to some 4 percent in economic equity according to the findings of the study conducted between March and June 2007.
The study’s focus was cross border mutual fund distribution in Europe’s two major markets, Luxembourg and Ireland which account for over 90 percent of the cross border trades.
“This study, for the first time, quantifies efficiency gains through streamlined processes of cross border investment funds. Clearstream is particularly proud to put its expertise, in other asset classes such as bonds and equities, at the service of the investment funds industry and to deliver solutions best adapted to the needs of market’s participants and best suited for the industry’s benefit” Says, Philippe Seyll, Head of Investment funds services at Clearstream.