VP LUX Plans Cross-Border Fund Platform for Distributors and TAs

VP LUX, the CSD of Luxembourg, will launch an automated order routing, settlement and CSD issuance platform on September 16 for cross-border fund distribution.

The platform, vp.FUND HUB, has already operated for over a year in Denmark, where parent company VP SECURITIES also operates the national CSD. vp.FUND HUB will now connect fund distribution ecosystem in Luxembourg, including transfer agents and issuers.

The platform works as both a fund order system and a fund clearing system. As an order system, distributors can submit buy and sell orders via a web interface or ISO 20022 messages, in any currency or as a measure of fund units. Then, at the cut-off time on each banking day specified by the transfer agent, vp.FUND HUB® aggregates all orders requests a NAV from the transfer agent. After receiving the NAV, the platform calculates the cash required for the transaction, and the relevant party then deposits the cash to the transfer agent’s account.

As a clearing system, vp.FUND HUB receives a statement from the transfer agent’s clearing account and the fund manager’s cash account, and the system then follows up with a check of holdings for the requested redemptions on all safekeeping accounts, followed by a netting against the relevant clearing account, and the cash deposited is checked by the distributor and transfer agent.

By using the system, transfer agents can reduce manual processing, and it’s compatible with the current transfer agent set-up and can be incorporated into the fund’s issuance process.

“The flexible system will ensure the future proofing of TAs, partnering institutions and investors with regard to CSD issuances and will help them connect to TARGET2-Securities. We will carefully ensure that this new offering supports our users’ business processes,” says Jan Vandendriessche, head of Fund Platforms at VP LUX.

“All in all, fund distribution via vp.FUND HUB and the network of CSDs provides safe, robust and rapid distribution, with a low risk profile,” says Bjørn Stendorph Crepaz, senior product manager at VP SECURITIES in Denmark.