RBC Dexia Investors Services Asia and Calastone, the global messaging and settlement transaction network for the global fund industry, have formed a strategic alliance to increase investment fund automation in Asia.
The move is being made in response to the significant growth in the Asian fund market, and is a major step towards greater efficiency in fund transactions in the region.
RBC Dexia’s Asian fund promoter clients and their respective fund distributors will benefit from direct connectivity to Calastone’s fund messaging and translation service. Asian fund distributors can connect directly to the network to deal into Asian domestic and cross border funds administered by RBC Dexia, using their preferred communication channel and message protocol. This will minimise IT resources, costs and timeframes usually required to move to a straight-through-processing model. Messages received into Calastone are normalised to industry standard ISO 20022 format using Calastone’s automated message translation service before being sent to RBC Dexia IS Asia.
With the increased popularity of domestic and cross-border investment funds amongst Asian distributors and investors, the volume of activity in the region has seen a spectacular rise in the last few years. Lack of automation in the Asian fund market has created growing operational challenges, risks and costs for fund promoters active in the region. It is estimated that today over 95% of fund orders in the region are still processed manually via faxes and phones.
Brent Reuter, Managing Director, Hong Kong for RBC Dexia Investor Services, says: “As the leading cross-border fund administrator, our primary objective is to offer our global client base the most efficient service levels from trade to settlement while managing operational risks and costs. This collaboration with Calastone enhances our existing offering by giving our fund clients and their respective fund distributors and investors more flexible and cost effective ways of placing trades electronically into the domestic and cross border funds for which we provide transfer agent and sub transfer agency services in Asia.”
Commenting on the agreement, Kevin Lee (pictured), chief executive of Calastone, says: “Following the tremendous expansion we have experienced with our fund message communication and translation service in the European market and the growing number of Asia distributors connecting to Calastone, we are very excited to roll out our services into the fast growing Asian fund market. This alliance with the largest cross-border third party transfer agent and one of the key local fund administrators, will provide Asian fund distributors with an easy, efficient and low cost solution to automate their fund processing flows into a very wide range of locally domiciled and cross-border funds distributing in Asia.”