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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.