Euroclear cuts FundSettle fees

Source: Euroclear

Euroclear Bank announces today a reduced sliding-scale tariff for FundSettle, reflecting strong growth in fund transactions routed and settled on an automated STP basis.

Effective 1 April 2005, straight-through processed transactions via FundSettle will cost between EUR 3 and EUR 15 per order, which is 10-25% below current prices, depending on volumes.

Commenting on the announcement, Thierry Logier, Director and head of Investment Fund Product Management at Euroclear SA/NV, said: "As Euroclear and the fund market continue to increase the level of automation in fund processing and asset servicing, we believe that our new price incentive will encourage even greater STP rates. Large-volume clients pay an average fee of just EUR 5 per transaction for order routing and settlement. We believe the uniquely comprehensive, low-cost features of FundSettle will persuade more third-party distributors to outsource their fund processing to FundSettle."

While fund distributors using FundSettle operate with 100% STP efficiency, only about 80% of transfer-agent communications are transmitted on an STP basis. That percentage is expected to rise to over 90% in 2005 as FundSettle and the transfer-agent community work together to automate transaction flows. As STP volumes rise, processing fees will continue to decrease.

The new pricing strategy rewards fund-industry professionals for investing in automation and STP, reducing substantially the burden of subsidising those that have yet to do so. Effective 1 April 2005, FundSettle will apply a flat fee of EUR 25 to any fund transaction not processed on an automated STP basis, reflecting the higher cost of processing.

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