In Beijing, Philippe Seyll explains Clearstreamâs role as an international central securities depositary to 900 Chinese asset management professionals.
Chinese asset management practitioners met with international industry experts at a Beijing forum in May organised by Clearstream in conjunction with the Asset Management Association of China (AMAC). The event, which was part of the AMAC Expert Forum series, attracted representatives from regulatory authorities, public funds, private funds, security firms, insurance companies and the banking industry.
Zhong Rhonsa, vice chairman of AMAC, introduced the event and the keynote speech was given by Philippe Seyll, head of investment fund services and a member of Clearstream’s executive board.
In his speech, Seyll, outlined how Clearstream fitted into the Deutsche Börse group’s strategy for integrated solutions, which comprises Deutsche Börse Xetra for cash markets, Eurex for derivatives, Eurex Bonds for fixed income markets, and Vestima for investment funds.
WORLD LEADER
In addition to Deutsche Börse being one of world’s leading exchange organisations headquartered in Germany, Clearstream is also one of the largest international central securities depositaries (ICSD) in the world. Seyll outlined Clearstream’s commitment to China, having the biggest global custody market share and dealing with numerous businesses ranging from sovereign entities, policy banks, state-owned commercial banks and commercial and foreign banks across a range of instruments, including eurobonds, domestic bonds, equities and currencies and across services, such as securities lending and collateral management. In looking at the business, Seyll said: “Clearstream accounts for close to 40% of Deutsche Börse’s revenues.” It is based in Luxembourg and has more than 2,500 customers and €12 trillion – or $16.34 trillion – of assets under custody. The Clearstream investment fund services business incorporates both mutual funds and hedge funds. The mutual funds business has more than €1.3 trillion of assets under custody, manages more than eight million transactions per annum and covers 120,000 investment funds routed on the Vestima platform. Futhermore, in the case of hedge funds the business is the largest custodian of third-party hedge funds with an alternative funds database of more than 23,000 actively traded funds. The primary aim of Vestima is to provide a fully automated process chain including order routing, settlement, reconciliation, account management, reporting and asset servicing, for a low cost and with high quality STP processing. In outlining the aim of Vestima, Seyll also highlighted the one-stop-shop nature of Vestima, integrating all users – banks, fund platforms, distributors, custodians and brokers – with transfer agents and hedge fund administrators on behalf of their respective mutual funds and hedge funds. As part of his presentation he also reviewed how the solution compared to both the transfer agent model and the central securities depositary, or CSD, model. He also gave the audience an overview of the processing model as well as a trading and settlement overview, including how operational controls and safeguards worked. New areas of development within Clearstream include the fund shares as collateral initiative, which ties together the group’s role as an ICSD with the global need within financial services to improve collateral management. MORE AUTOMATION
Seyll summarised the issues likely to affect the industry: Hong Kong and China mutual fund recognition; the ASEAN fund passport; and the Alternative Investment Fund Managers Directive. There will be areas of increased exposure and assessments, Seyll said, and these include collateral management, counterparty risk, OTC trading, trailer fees, and reconciliation. All of these lead to a requirement for more reporting and more automation. In conclusion, Seyll said he strongly believed that Vestima represented the way forward for reducing manual processes and, therefore, both operational risk and processing costs. At the same time, said Seyll, Vestima provided scalability and tailored solutions without the need for significant implementation costs. These are global requirements across the entire industry. Seyll then finished proceedings by taking part in a question and answer session with the audience. ©2014 funds global asia
In addition to Deutsche Börse being one of world’s leading exchange organisations headquartered in Germany, Clearstream is also one of the largest international central securities depositaries (ICSD) in the world. Seyll outlined Clearstream’s commitment to China, having the biggest global custody market share and dealing with numerous businesses ranging from sovereign entities, policy banks, state-owned commercial banks and commercial and foreign banks across a range of instruments, including eurobonds, domestic bonds, equities and currencies and across services, such as securities lending and collateral management. In looking at the business, Seyll said: “Clearstream accounts for close to 40% of Deutsche Börse’s revenues.” It is based in Luxembourg and has more than 2,500 customers and €12 trillion – or $16.34 trillion – of assets under custody. The Clearstream investment fund services business incorporates both mutual funds and hedge funds. The mutual funds business has more than €1.3 trillion of assets under custody, manages more than eight million transactions per annum and covers 120,000 investment funds routed on the Vestima platform. Futhermore, in the case of hedge funds the business is the largest custodian of third-party hedge funds with an alternative funds database of more than 23,000 actively traded funds. The primary aim of Vestima is to provide a fully automated process chain including order routing, settlement, reconciliation, account management, reporting and asset servicing, for a low cost and with high quality STP processing. In outlining the aim of Vestima, Seyll also highlighted the one-stop-shop nature of Vestima, integrating all users – banks, fund platforms, distributors, custodians and brokers – with transfer agents and hedge fund administrators on behalf of their respective mutual funds and hedge funds. As part of his presentation he also reviewed how the solution compared to both the transfer agent model and the central securities depositary, or CSD, model. He also gave the audience an overview of the processing model as well as a trading and settlement overview, including how operational controls and safeguards worked. New areas of development within Clearstream include the fund shares as collateral initiative, which ties together the group’s role as an ICSD with the global need within financial services to improve collateral management. MORE AUTOMATION
Seyll summarised the issues likely to affect the industry: Hong Kong and China mutual fund recognition; the ASEAN fund passport; and the Alternative Investment Fund Managers Directive. There will be areas of increased exposure and assessments, Seyll said, and these include collateral management, counterparty risk, OTC trading, trailer fees, and reconciliation. All of these lead to a requirement for more reporting and more automation. In conclusion, Seyll said he strongly believed that Vestima represented the way forward for reducing manual processes and, therefore, both operational risk and processing costs. At the same time, said Seyll, Vestima provided scalability and tailored solutions without the need for significant implementation costs. These are global requirements across the entire industry. Seyll then finished proceedings by taking part in a question and answer session with the audience. ©2014 funds global asia
At times like these, HSBC Asset Management easily pivots towards emerging markets.
A comprehensive, cost-effective, and transparent currency overlay hedging solution is crucial to mitigate FX exposure risks in the complex landscapes of Japan and China's FX markets, explains Hans Jacob Feder, PhD, global head of FX services at MUFG Investor Services.
The world is transitioning from an era of commodity abundance to one of undersupply. Ben Ross and Tyler Rosenlicht of Cohen & Steers believe this shift may result in significant returns for commodities and resource producers over the next decade.
Ross Dilkes, fixed income portfolio manager at Wellington Management, examines the opportunities and risks for bond investors presented by the region’s decarbonisation agenda.
Shareholders in Japan no longer accept below-par corporate governance standards. Changes are taking place, but there are still areas for improvement, says Tetsuro Takase at SuMi Trust.
Robert St Clair, head of investment strategy at Fullerton Fund Management, explores the reasons investors should be paying attention to the rising demand for healthcare in China.
