Simplified settlement of Vestima orders
Effective
30 September 2013
customers of Clearstream Banking1 will benefit from simplified and improved settlement of orders placed via the Vestima investment funds order routing service.
In general, orders in European investment fund shares will settle on a Delivery versus Payment (DvP) basis, except for those subscriptions that must be prepaid. A high degree of operational efficiency is ensured through DvP settlement by virtue of the synchronous exchange of cash and investment fund shares. Customers will also see an improved rate of settlements reaching finality on the contractual settlement date of the order confirmation.
There is no change to the content of orders issued to Vestima, and full settlement details are communicated in the order confirmation that is returned by Vestima to the Order Issuer. Customers who have their settlement instructions generated by Vestima will enjoy the benefits of the changes described here with no effort required on their part. Customers who need to update their own reference data with the simplified settlement model are welcome to contact Vestima Customer Services for detailed information (see contact details below). Order receivers and fund companies will continue with the same processing of payments and settlement of investment fund shares as today.
Note: These enhancements are rolled out to all customers of the Vestima investment funds order routing service and are applicable for the settlement of the Vestima order transactions as described below. The existing DvP process for Vestima orders, as well as transfers of fund shares, will remain unchanged.
DvP transformation
Various Free of Payment (FoP) settlement processes2 will no longer involve the customers, who will only have to settle DvP against a counterparty account in CBL. The complexities of settlement with the relevant fund company will be fully automated by Vestima through the counterparty account in CBL.
Prepaid subscriptions
Customer payments for subscription orders in investment fund shares that must be prepaid will see improved rates of payments received by the fund companies with good value. An instruction will be issued by Vestima for an internal transfer of cash from the customer’s account to a transit account in CBL; the payment is then made from the transit account to the respective fund company. This process is fully automated and applies also to those customers that normally do not have their settlement instructions generated by Vestima. After the order is confirmed, the settlement of investment fund shares is booked against a counterparty account in CBL.
Further information
For further information, customers may contact, as appropriate:
| Vestima Customer Services | |
| Email: | csvestima@clearstream.com |
| Telephone: | +352-243-32833 |
| Fax: | +352-243-632833 |
or their Relationship Officer.
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1. Clearstream Banking refers to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B-9248 (CBL). This information outlines services provided to customers of CBL and LuxCSD, not all of which are available to customers who hold accounts with Clearstream Banking AG, Frankfurt (CBF). Services and information that are available to CBF customers as well shall apply mutatis mutandis.
2. The settlement processes for Vestima orders in investment fund shares held at Specialised or Common Depositories, and for Vestima orders (other than prepaid subscriptions) where the fund company settles through its own account in CBL, are not affected by these enhancements.
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