27 April 2016
Reporter: Stephanie Palmer

Calastone Settlements signs landmark client

Hargreaves Lansdown has gone live with Calastone’s funds settlement solution, Calastone Settlements.

The net settlement solution provides a matching engine, allowing buyers and sellers to match trades, before they settle in a single net movement.

Designed specifically for the funds industry, the solution automates reconciliation and settlement processes for investment funds, and intends to improve efficiency and liquidity position.

Calastone has estimated that about 52 percent of trades are, in effect, settling unnecessarily. This equated to approximately £158 billion in 2015 alone.

The settlement solution also means counterparties can know their liquidity positions before the trade actually takes place.

Jon Willis, chief commercial officer at Calastone, pointed out that the solution can only be fully effective as a community, or network, including both distributors and fund managers.

When the solution launched last year, he said, it saw some momentum. However it required a participant with a large transaction volume in order to make the solution sustainable.

Willis said: “Hargreaves is really important for us because it gives the level of volume to bring the product out of the ‘beta’ stage and in to a full-blown support system, where it can actually start helping to drive economy.”

“That support is driving a second wave of fund managers to sign up, and that in turn will make it more attractive to more distributors. It's a swing effect.”

Danny Cox, head of communications at Hargreaves Lansdown, said: “Automatic matching of trades and the netting of settlement positions early in the day will improve the efficiency of our operational and treasury teams. Given the number of transactions that Hargreaves Lansdown processes this is of huge benefit.”

Willis added: “Conceptually, the community understood that there was a problem in the marketplace that could be solved, both from an operational efficiency and a liquidity risk aspect. But, certainly having endorsement from an institution like Hargreaves, considering a reputational and a scale standpoint, is hugely beneficial.”

“The more people that adopt the solution, the greater the efficiency for the industry as a whole.”

More news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Tom Carey takes on new role at Broadridge
16 January 2018 | New York | Reporter: Zsuzsa Szabo
Broadridge Financial Solutions has appointed Tom Carey to head up the firm’s new international business Broadridge International
Raymond James selects Red Deer for MiFID II
16 January 2018 | London | Reporter: Jenna Lomax
Raymond James Investment Services has chosen Red Deer’s research valuation management solution to adhere to MiFID II
SWIFT and CSDs join forces on proxy voting DLT
15 January 2018 | Brussels | Reporter: Jenna Lomax
SWIFT and seven CSDs have partnered to explore how distributed ledger technology could be implemented in proxy voting and for digital assets
Saxo Bank appoints CCO
15 January 2018 | London | Reporter: Jenna Lomax
Bunce will begin his new role in February 2018 and will report to Kim Fournais, CEO and founder
HSBC creates head of innovation role for blockchain actions
15 January 2018 | London | Reporter: Jenna Lomax
Nabi will be responsible for establishing and managing initiatives across HSS — focusing on technology as well as digital and data solutions
Northern Trust acquires technology resources from Citadel
12 January 2018 | Chicago | Reporter: Jenna Lomax
Citadel has agreed to give Northern Trust the software development rights for Omnium, a software solution, along with an undisclosed number of development staff
Lombard Risk share prices soars after Vermeg takeover offer
12 January 2018 | London | Reporter: Zsuzsa Szabo
Dutch financial software provider Vermeg has set its sights on acquiring Lombard Risk with a £52.08 million cash for shares offer
More news