The Central Facility for Funds (CFF), the innovative post trade solution for off shore investment funds, launched in 2007 by Clearstream, counts 21 members and offers access to more than 15,000 fund classes one year after its launch in March 2007.
CFF offers a more efficient post trade solution primarily for investment funds domiciled in Luxembourg, the largest market in Europe for international funds with over € 2000 billion in assets under management. CFF's business and operating model also accommodates other funds domiciles such as Belgium (since December) and Ireland (since February).
Sixteen of CFF's 21 members are Luxembourg based (Bank of New York (Luxembourg) S.A., Banque de Luxembourg, Caceis Bank (Luxembourg) (Fastnet), Hauck & Aufhäuser Luxembourg, HSBC Securities Services Luxembourg, ING Luxembourg, Nordea Bank SA, Pictet & Cie (Europe), Schroder Investment Management (Luxembourg), State Street Bank Luxembourg S.A….), three are based in Dublin (Capita Financial Administrators Ireland (CFAI) Limited, PFPC International Ltd, State Street International Ireland),and two in Belgium, RBC Dexia investor services Belgium S.A. and KBC Bank NV.
"Clearstream is more than ever committed to position CFF as the settlement infrastructure of choice for cross border settlement of investment funds in Europe" said Philippe Seyll, Head of Clearstream's investment Funds business. "A year after its launch, CFF has demonstrated its usefulness and attractiveness for investment funds regardless of their domicile. It is one of the leading contributors to the much needed standardization of the investment funds industry post trade operations."
CFF offers for all participating firms (transfer agents, fund distributors and fund promoters) one single set of settlement and payment instructions for all eligible funds, which accelerates and simplifies operational processes, as well as reduces risks. CFF provides post trade services only, with an architecture open to the various order execution processes and is fully integrated with Clearstream's existing ICSD custody and settlement services. This enables customers to benefit from the CFF service while keeping the advantages of the full integration of their holdings in investment fund shares with those in other asset classes. CFF does not change the direct relationship between distributors and transfer agents and it does not provide direct access for retail customers or independent financial advisors (IFA).
Clearstream designed CFF as an answer to growing market demand in Europe and in Luxembourg. Although the industry has grown 80% since 2005, its post trade area is still characterized by high fragmentation, little standardization and thus operational risk. According to a study by Deloitte, the cross border investment funds industry could save 30 percent of processing costs and gain over € 300 million by streamlining trading, settlement and custody of cross border mutual funds.