Your guide to vp.FUND HUB®
from VP SECURITIES
July 2015
vp.FUND HUB®
vp.FUND HUB®
2
VP SECURITIES offers a wide range of services in
connection to issuance of investment fund units
With vp.FUND HUB® you can streamline your order routing, unify your
issuance process and sign up for an
effective international fund distribution platform.
The ability to automate existing processes, from order routing all the way
to settlement, makes vp.FUND HUB®
a unique solution for Distributors,
Transfer Agents and Fund Managers.
The automated facilities of
vp.FUND HUB® enable Distributors
to seamlessly order investment funds
for their own account, or on their clients’ behalf. At the same time, Transfer Agents benefit from a central platform, which increases transparency
and streamlines the order routing and
settlement process. By this means,
Fund Managers can take advantage of
an efficient international distribution
platform for their products.
PARTICIPANTS AND ROLES
The Distributor’s task is to generate
demand for the fund units in the
respective market. The Distributor
holds its clients’ fund units on an
omnibus safekeeping account with its
custodian (Account Controller) at
VP SECURITIES. The custodian is
required to be able to book enter
holdings of Single Price Investment
funds to more than 2 decimal places.
The Transfer Agent is a bank that
acts as Issuing Agent on the Fund
Manager’s behalf, and is responsible
for the issuance and redemption of
fund units according to the Distributors’ orders. This responsibility is
outsourced to vp.FUND HUB® and
for each issue the Transfer Agent
defines which Distributors are authorised to submit orders. The Transfer
Agent also provides a Cash Clearing
Account to which the Distributors deposit the cash required for Clearing.
The Fund Manager is the issuer of
the fund units and has a need to
distribute them. It uses the Transfer Agent to interact with vp.FUND
HUB® and to handle issuance and
redemption, as well as Corporate
Actions. The Fund Manager also
provides the NAV (Net Asset Value)
of the fund at any time. Although the
Fund Manager is not a direct participant in vp.FUND HUB®, it enters into
a tripartite issuance agreement with
the Transfer Agent and VP.
Fund
manager
Transfer
Agent
BENEFITS
▪▪ Reduction of manual processes,
due to the automated interface
for order routing (ISO 20022 via
SWIFT Net or MQ; web interface)
▪▪ Reduction of complexity and risk,
due to an automated issuance
process via a CSD
▪▪ International scalability, due to
commercial cash clearing
▪▪ Efficient use of cash, due to the
netting of the cash required by
Distributors
▪▪ Order submission as amounts or
fund units
▪▪ Book-entry of holdings to up to 6
decimal places
VP
SECURITIES
Custodian
Account controller
vp.FUND
HUB®
Distributør
Distributor
Distributør
Transfer Agents
commercial bank
account
vp.FUND HUB®
3
FUNCTIONALITY
vp.FUND HUB® consists of two modules: the Fund Order System and the
Fund Clearing System.
DESIGN YOUR OWN SETTLEMENT!
Fund Order System
The Fund Order System manages the
order lifecycle on the trading day.
Distributors can submit buy and sell
orders (issuance and redemption
requests) via a web interface or ISO
20022 messages. These orders can be
submitted as amounts (e.g. fund units
for SEK 2,000,000), or as fund units
(e.g. 100 fund units).
▪▪
▪▪
▪▪
On each banking day, at a time specified by the Transfer Agent (cut-off),
vp.FUND HUB® aggregates all single
orders into one bulk order and requests a NAV via the Transfer Agent.
Upon receipt of the NAV,
vp.FUND HUB® calculates the Cash
required for the relevant Distributors
and for Transfer Agents (in the case of
net redemptions).
The Distributors are now obliged
to deposit the Cash required to the
Transfer Agent’s commercial bank account, while the Fund Manager must
ensure that it has the Cash required
on its designated Cash account.
Fund Clearing System
The Fund Clearing System manages
the order lifecycle on the settlement
day, consisting of a primary and a
secondary settlement cycle.
The Transfer Agent can choose different parameters for
settlement by ISIN:
Choose the modules
Fund Order module
Fund Clearing module
Issuance module (FOP)
Choose a cash solution
Determine the Commercial
Cash Clearing Account for
Distributors and the Fund’s
Cash Account
Decide on business parameters
▪▪ Roll-over of orders when the Distributor has a lack of cash
▪▪ Issuance to the Fund’s safekeeping account for orders where the
Distributor has a lack of cash
Settlement convention
Decide how many days there
should be between the trading
day and the settlement day
On the settlement day,
vp.FUND HUB® commences each
settlement cycle by receiving a
statement from the Transfer Agent’s
Clearing account and the Fund Manager’s designated Cash account. This
is followed by a check of holdings
for the requested redemptions on
all safekeeping accounts. All orders
are then netted against the relevant
Clearing account, and the cash deposited is checked per Distributor and
per Transfer Agent. Unique identifiers ensure that all deposits can be
Cut-off time on the
trading day
Determine the cut-off time
on the trading day for all
distributors to submit orders
assigned to the correct Distributor on
the Clearing account.
Orders that are deemed to be covered by the required cash or holdings
will be settled to the respective safe
keeping accounts. At the same time,
the general ledger account for the
ISIN will be increased or decreased.
Simultaneously, vp.FUND HUB® sends
cash instructions for the Clearing account to transfer the respective cash
to the Fund Manager’s account and/or
the Distributor’s account.
vp.FUND HUB®
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If vp.FUND HUB® detects a lack of
money, the relevant orders will be
deferred to the secondary settlement
cycle. All subscription orders in the
secondary settlement cycle that still
have a lack of money will be issued to
the Fund Manager’s safekeeping account. The Transfer Agent will follow
up outside vp.FUND HUB® and ensure
that the fund units are transferred
upon receipt of cash. Redemption
orders that cannot be redeemed due
to a lack of money will be rejected in
the secondary settlement.
If there is a lack of units, the redemption orders will be rejected, irrespective of in which settlement cycle the
lack of units was found.
vp.FUND HUB® s order-routing and
clearing modules can be combined
flexibly to suit your needs.
FURTHER INFORMATION
Please contact Head of Business
Development, Issuance & Safekeeping Bjørn Stendorph Crepaz at
bsc@vp.dk or +45 2969 2815.
VP SECURITIES IN BRIEF
VP SECURITIES (VP) is a financial service company that offers solutions and
expertise within the field of securities
and investor administration. VP is
responsible for registering securities
in Denmark and is instrumental in
ensuring that securities trading are
conducted promptly, inexpensively
and reliably for the benefit of all market participants. The majority of listed
Danish securities are issued and kept
in electronic custody accounts in VP.
VP also ensures the efficient brokering
of interest, instalments and dividends
from issuer to investor.
Read more on www.vp.dk
VP SECURITIES A/S
Weidekampsgade 14
DK-2300 Copenhagen S
P +45 4358 8888
E vp@vp.dk
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