Calastone and Barclays confirm Europe next for net settlements service

Calastone, the funds transaction services provider, and Barclays Corporate gave asset managers and distributors in London a briefing today on the launch of their net settlement service for trading funds in the UK, which they say will next be rolled out into other domiciles such as Luxembourg and Dublin.

Dan Llewellyn, managing director of European Business Development, Calastone, said the new service was part of the company’s ongoing development to meet its mission statement to reach “100% of the fund management industry”.

So far Calastone is best known in the UK market for its service handling buy and sell orders from asset managers. The net settlement service has been developed off the back of client requests for a system that could help them net off buy and sell orders to facilitate daily liquidity, to speed up processing, and reduce their administrative burden.

These discussions started at the end of 2009 with the likes of fund distributors such as Cofunds, Nucleus, Capita and IFDS. This progressed to discussions with counterparty partners, resulting in a deal with Barclays Capital.

While Calastone brings a platform for asset managers and distributors to initiate and track settlements, it is Barclays that actually manages the settlement acounts, and ensures that netting off is processed in time for clients.

Key benefits for asset managers are seen as potentially lower costs feeding through to total expense ratios, as well as reducing trading liquidity risk. Barclays will offer intraday credit lines. Reconcilliation is also facilitated through the system.

Barclays said that it saw the launch of the net settlement system in the UK as a launchpad for what it expects will be a service proposition pushed into other markets, particularly in Europe.

Llewellyn added that Calastone’s existing focus on growing its business globally meant that it was developing “exportable” solutions, partly in order to be able to follow clients growing their own businesses into other markets.



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