Investec Wealth and Investment Ltd (‘IW&I’), a leading wealth manager with responsibility for in excess of £26 billion clients’ AUM, has adopted Euroclear UK & Ireland’s (EUI) automated settlement and custody service; CREST, for its UK investment fund flows.
By going live with EUI, IW&I has extended distribution automation from order placement to now include full settlement of unit and related cash movements, as well as holdings reconciliation.
EUI’s automated fund service addresses known problems associated with fund processing, namely time-consuming manual operations, unacceptably high cost and risk, manifested by a lack of precision around when fund units and cash are exchanged. The service utilises EUI’s robust delivery-versus-payment settlement and custody capabilities within the UK’s CSD CREST, which is also widely used in the UK market for equity and bond transactions.
Judy Price, Chief Operating Officer at Investec said: “Euroclear UK & Ireland’s investment fund service now allows us to process unit trust funds alongside other Crest-eligible asset classes. The decision to consolidate unit trust settlement with UK equity and gilt settlement using Euroclear introduces welcome automation and significantly boosts the operational controls and risk frameworks we have in place.”
Katrina Sartorius, Head of Product Management at Euroclear UK & Ireland, commented: “Extending operational efficiencies to the capital markets where we operate, while in parallel driving out as much risk as possible, is intrinsic to our role in the markets. So, it is a very rewarding compliment and sign of trust for a CSD such as ours to be chosen by one of the country’s major financial institutions for their domestic flows.”
Created in partnership with approximately 40 fund organisations, Euroclear UK & Ireland’s automated fund processing solution delivers end-to-end automation from the placing of a funds order, to the settlement, transfer, reconciliation and corporate action processing of the asset.
Firms using EUI enjoy major reduction in operational and counterparty risk, as well as decreasing costs. The UK CSD solution allows clients to benefit from a significant reduction in trade-to-settlement cycles. Unit movements and related cash debits and credits can be monitored in real time and reconciliation is automated.