According to Deutsche Borse, after execution, the funds will be settled through Clearstream’s post-trade facility for mutual funds, the Central Facility for Funds (CFF).
Currently, in the primary market, the value of an individual funds share can only be identified the next day, i.e. once the net asset value has been calculated. Stock exchange execution will allow individual funds units to be priced and monetized immediately.
Accordingly, customers trading investment funds on exchange and pooling them within Clearstream can use their funds units as collateral to efficiently secure financial transactions involving counterparty risk.
Clearstream head of Investment Funds Services Philippe Seyll said by linking Vestima+ to a stock exchange, Clearstream creates an additional distribution venue for investment funds for its clients.
"In an environment where almost no financial commitment occurs without being secured, the new offering will also create a new large source of collateral of around EUR700bn that is currently immobilized," Seyll said.
