Clearstream expands fund platform to Cyprus

On 7 January 2019, Clearstream, one of the most well-known Luxembourg based international central securities depository (ICSD), announced a further expansion of its Vestima offering by making Cyprus domiciled investment funds, including alternative investment funds (AIFs) and collective investment in transferrable securities (UCITS), eligible for order routing, settlement and custody. According to Bernard Tancre, head of investment fund services at Clearstream, "adding Cyprus funds to Vestima shows not only the demand from our clients, but also our confidence in Cyprus as an emerging funds domicile."

Further to the announcement, international customers may now use their Vestima setup for the purposes of direct access to Cyprus domiciled funds and benefit from the same streamlined handling as for other markets.

The announcement highlighted the notable development witnessed in the Cyprus fund market outlining the impressive increase of assets under management from €2.1 billion in 2012 to €4.8 billion in 2018. Remarkably, Cyprus is fast becoming one of the optimal emerging fund centres in Europe and the continuous efforts and initiatives taken by international leading service providers in this field, like Clearstream, combined with the low operating costs, effective tax system and simple legal system based on English common law contribute significantly to this increased and promising development.

Vestima: a single platform for fund processing

Essentially, Vestima is a single platform developed to simplify all aspects of investment funds trading. It assembles Clearstream’s entire set of investment fund services providing order routing, execution and management service from Clearstream Banking as well as settlement and asset servicing for alternative and mutual funds. It is available for Clearstream’s ICSD customers as well as Vestima’s central securities depository in Germany and Luxembourg. It is also broadly known as the “one stop shop for funds”.

Vestima Services

All types of funds from mutual to alternative are covered in Vestima. Vestima provides consolidated services to investors across all investment fund classes.

  • Account operator: a service holding the respective positions in the fund register in the name of the customer or its nominee with Clearstream as attorney of the customer or the registered nominee for the performance of certain Vestima services;
  • VestimaPRIDE data: this service provides maintenance services to the hedge fund portfolio of investors and fund distributors (including but not limited to reference data and pricing to customised reporting);
  • Investment funds as collateral: an automated service which leverages investment funds to secure collateralised transactions;
  • Vestima-transfer services: a service handling the transfer of investment funds to and from Clearstream via the register of the transfer agent;
  • Published fund list: a service designed to enable customers to overcome the challenges of changing fund data and to improve the operational efficiency of the placement of fund orders.

For more on Clearstream’s acceptance of Cypriot funds please see here.

If you have any questions, please contact Katerina Katsiami or your usual Harneys contact.