Clearstream begins Singaporean funds settlement.
Singaporean investment funds are now eligible for order routing, settlement and custody through Clearstream, the central securities depository owned by Deutsche Borse Group.
The exchange operator said that investment funds from other Asian jurisdictions will follow once they have regulatory approval. The Singaporean funds are made available on the Clearstream order routing platform Vestima+ and its post-trade infrastructure for funds, the Central Facility for Funds, for settlement.
Clearstream and the Deutsche Borse cash market Xetra recently launched the trading of mutual funds via the stock exchange. Units of a fund are typically bought and sold on the primary market, with the fund buying back the sold unit and selling a newly issued unit to the buyer. The value of an individual fund's share can only be identified the next day, once the net asset value has been calculated. By offering stock exchange execution, individual funds units can be priced and monetised immediately, which is expected to be attractive to investors in non-European timezones.
Once traded on the stock exchange and pooled in the Clearstream systems, funds can be re-used as collateral.
Philippe Seyll, member of the executive board of Clearstream and head of investment funds services, said, "We are happy to include the first Asian Funds on our systems and to allow international investors easy access to these financial instruments. Through our order routing platform Vestima+, we bring more than 82,000 investment funds to investors around the globe. We observe a tremendous appetite by Asian investors for investing into the funds that we hold on our platform."