Supporting Collective Investment Management
KSD manages the details of increase and decrease due to collective investment asset’s acquisition, disposal, distribution, and records it on fund ledger and participant account book. There are three main services of management supporting. The first one is confirming a transaction between an asset management company and a securities & futures company, and the second is asset management instruction between an asset management company and a trustee & a fund administrator. The last is securities & fund settlement between a trustee and a securities company.
The details of supporting management service
- Trade confirmation
- A broker sorts out the transaction details made by an asset management company’s order according to a management company’s entrusted account and sends the details to KSD in real-time.
- As soon as KSD gets the transaction details, KSD sends it to a concerned asset management company and helps to confirm transaction mutually.
- Management Instruction
- Immediately after an asset management company checked the transaction details received from KSD, the asset management company sends all the details of fund by fund management instructions based on the standard of fund by fund pre-allocation.
- Next, KSD transmits the instructions to a trustee (a custodian) and a fund administrator in real-time, and supports the settlement and accounting procedures under the management instruction.
- Furthermore, KSD verifies the adequacy of the management instruction by checking the correspondence between the transaction details and the instruction.
- Delivery Versus Payment (DVP)
- As a first step, a trustee (a custodian) should check the details of an asset management company’s management instruction. Next, the trustee approves the securities settlement under the related management instruction by using the KSD’s institution settlement system.
- On settlement date, KSD settles securities and funds on trustee-by-trustee DVP basis of each institution settlement (a trustee) through the institution settlement system connected with BOK-Wire of Bank of Korea.
- Management of fund ledger
- KSD administers securities deposited or obtained on a DVP basis by a trustee separately for each trustee and each asset management company. Next, KSD records the details of the securities in participant account book and manages them with a fund ledger which is sorted on a fund by fund basis.
- KSD check constantly the correspondence between a trustee’s securities volume recorded in participant account book and the total securities volume of the fund managed by the trustee.
Other services related to management instruction
- Management instruction about trade confirmation of foreign securities
- In the event that a domestic asset management company invests foreign securities through a securities company in a foreign country, KSD connects FundNet with Omego, the global US-based trade confirmation expert, and supports real-time automatic trade confirmation between concerned parties.
- The asset management company‘s management instruction about the foreign securities transactions which get confirmed is transferred to a trustee and a fund administrator in the automated method through FundNet.
- Types of services
Types of services : Direct management of foreign investment fund, Consigned management of foreign investment fund Direct management of foreign investment fund Consigned management of foreign investment fund This service is provided when a domestic asset management company invests foreign securities directly through a domestic fund. This service is offered when a domestic asset management company consigns management of foreign securities to a foreign asset management company.
- Supporting management of discretionary investment
- KSD supports all services about the work related to a discretionary investment contract about discretionary investment asset being managed like funds. The discretionary investment contract is signed between a client of discretionary investment (a beneficiary) and a management institution (including investment advisories). KSD supports all works related to the contract which are the asset management related business such as transaction confirmation, management instruction, and deposit & settlement through FundNet.
- Matching fund portfolio
- This is the comparing & certifying service of portfolio balance managed by an asset management company and a trustee. When an asset management company or a trustee that wants to get portfolio balance certified, they should transmit the portfolio’s details to FundNet. Thereafter, Central Matching Engine will give the result back to applicants on every each period.
- Supporting sales of foreign funds
- KSD supports the works related to foreign fund investment such as opening an account, foreign fund’s subscription & redemption confirmation, settlement, rights exercise, checking net asset value and balance management. This service is available because KSD connects FundNet with global fund investment support platforms which are operated by Euroclear and Clearstream.
- Service types
Service types : Fund of funds (FOF) which invests foreign funds, Retail sales of foreign fund Fund of funds (FOF) which invests foreign funds Retail sales of foreign fund
- In case a domestic asset management company subscribes an international investment fund and invests in a foreign fund
- The service is provided mainly to asset management companies, trustees and fund administrators.
- In case domestic investors such as Individuals or corporates acquire foreign fund directly through domestic distributors
- Banks and securities companies mainly use the service.