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Clearstream To Launch Vestima Transaction Service

The platform seeks to increase efficiency and help shorten settlement cycles by offering fund companies an outsourcing option for processing and management services.

Clearstream is launching a new multi-currency business-to-business trading platform called Vestima for the investment funds market.

The platform seeks to increase efficiency and help shorten settlement cycles by offering fund companies an outsourcing option for processing and management services.

The new transaction service--which will be available to fund managers, transfer agents and fund distributors--will provide them with a centralized location where they can list all of their products and services. Products can be purchased electronically and then cleared and settled through Clearstream. With the new system, a fund order would be sent from the fund distributor to the transfer agent for execution in a common standard format. The confirmation would then be returned to the fund distributor when the order has been executed. The system is S.W.I.F.T- and XML-compliant, and accessible through the S.W.I.F.T network or through any browser.

Grahm Prosser, managing director of customer relations worldwide for Clearstream, says that Vestima is an example of how synergies that arise from mergers can provide real value to customers. Clearstream was formed last autumnfrom the merger of Cedel International and Deutsche Borse Clearing. The merger became final at the beginning of this year.

Prosser says that the new Vestima platform is also an example of a company getting away from cumbersome legacy systems. Clearstream was no exception to the industry-wide struggle with legacy technologies, he says, having maintained systems that were "complex and over-engineered." He adds that Vestima is a fresh technological start. The new system was developed by Clearstream, which worked with Datawise Training and Consultancy Services Ltd.

The goals and features of the new system include: error reduction through centralized routing and verification, a comprehensive fund database, straight-through processing (STP) for subscription, redemption and switch orders, support for fractional shares, and secure user-access permissions, such as smart cards and encryption.

"We were missing a piece in our portfolio at the order-routing level," says Prosser. "Vestima will allow customers to buy, subscribe to, and sell investment fund shares, as well as switch and transfer funds."

Although Prosser says he expects many of Clearstream's clearing and settlement customers will want to make use of the system and indicated that there were new customers in the Vestima pipeline, he declined to name any. Clearstream says Vestima will be operational on October 23.

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