Subscription and Redemption of Collective Investment Securities
KSD offers an automated processing service handling a series of work from subscription of collective investment securities to distribution and redemption
Details of subscription and redemption services
- Subscription and redemption services
- When an asset management company gives an approval of a distributor’s fund subscription and redemption application, the payment on subscription or redemption date and the delivery of collective investment securities are settled under DVP.
- In case that an asset management company receives subscription fund from a distributor and has a confirmation from a trustee, collective investment securities are issued in the name of KSD. KSD receives & deposits the securities, and manages the securities by recording the details in the depositor’s account of the distributor.
- Various applications
- In the event that convertible fund investors exercise the conversion right via a distributor, KSD acts as a shareholder of a beneficiary list for the work related their applications.
- In case of conversion application to an asset management company and same master-feeder fund, the various applications include direct subscription and redemption application between funds by the asset management company.
- Management of a beneficiary list (shareholders’ list)
- KSD records the beneficiary list (a shareholders’ list) including details of increase and decrease of securities issuance about subscription & redemption of collective investment securities and manages it.
- If an asset management company sets up fixed date and requests a general meeting of beneficiaries (shareholders), KSD confirms an actual beneficiary list (actual shareholder’s list) based on the details of participant account book of a distributor on specific fixed date. Thereafter, KSD notifies the actual beneficiaries (actual shareholders) of the convocation two weeks before the general meeting.
- Rights exercise
- KSD exercises the rights caused from deposited collective investment securities as a shareholder of a beneficiary list.
- KSD does the following work for the rights exercise. The first is the confirmation work of an actual beneficiary’s list due to extension of trust period or change of a trustee for a beneficiaries’ meeting. The second is the work related to the appraisal right caused by change of collective investment rules or a merger. Next is sorting out fund asset and fund types owing to partial redemption & deferred redemption. The last is the confirmation and payment of dividend or a maternity dividend.
- Subscription and redemption cycle of fund types
Subscription and redemption cycle of fund types : Category, Subscription cycle(Notification of the subscription funds, Subscription (settlement date)), Redemption cycle(Redemption application, Confirmation of redemption funds , Redemption (payment date)) Category Subscription cycle Redemption cycle Notification of the subscription funds Subscription (settlement date) Redemption application Confirmation of redemption funds Redemption (payment date) MMF T T(T+1) T T(T+1) T(T+1) Bond type T T+1 T T+2 T+2 Stock type T T+1 T T+2 T+3
Benefits of the subscription & redemption services
- Prompt, easy, and efficient process for the subscription & redemption
The process of the subscription & the redemption becomes more prompt, easy, and efficient due to the issuance of collective investment securities by the blanket deposit and the centralized processing system through deposit and FundNet.
- Convenient exercise of fund rights
Participants can exercise fund rights much easily through participant account book.
- Transparent and stable service environment
Asset management institutions such as an asset management company and a distributor can work in further transparent and stable working environment through standardization and automation of the fluent information flow provided by KSD.
Other integrated services
- Fund Distributor Switch Service
- This service makes the two things available. First, fund distributors do a fair competition each other through their differentiating services. Second, clients can choose distributors freely without paying handling fee.
- KSD offers Distributor Switch Service to clients by obtaining clients’ switch information through FundNet.