The connection enhances access to Thai and international funds for domestic and global participants
In September 2018, the Stock Exchange of Thailand (SET) and Clearstream Banking S.A. (Clearstream) announced the online linkage of their respective fund platforms, FundConnext and Vestima. The linkage marks unprecedented cross-border cooperation and aims to broaden opportunities in the Asian investment fund markets for international investors. FundConnext and Vestima are connected via SWIFT and ISO 20022 to enable cross-border fund subscription and redemptions.
With the linkage that went live in September 2019, Clearstream’s international investors are now able to access Thailand domiciled fund by routing orders over SWIFT directly to the fund register held by SET. Vice-versa, the 19 asset management firms connecting to FundConnext can now place orders for the funds published on Vestima.
Going back to the origins of the project, Michelle Goh, Head of Product Management, Asia Pacific Investment Funds Services, Clearstream explains: “Our customers requested to have access to the Thailand funds market. At the same time, it was aligned with FundConnext plans to help Thai investors with wider opportunities to allocate their assets overseas”.
Kitti Sutthiatthasil, Executive Vice President, The Stock Exchange of Thailand added: “The Thai asset management companies will be able to reach investors globally in the most efficient way. Because right now, rather than having to wait for a fax or a phone call, the whole process is standardised and digitised, meaning they can just plug in with our platform”.
In order to connect the two platforms using a common language, Clearstream and SET chose to leverage ISO 20022, the global standard for financial transactions. Reusing ISO 20022 as a standard along the universal messaging platform SWIFTNet enhances interoperability and straight through processing in a cost-efficient way, as Michelle Goh remarked: “Clearstream Vestima currently uses ISO 20022 and the standard was actually an obvious choice for Clearstream to connect to FundConnext”.
Kitti Sutthiatthasil added: “SWIFT has been very supportive and has helped us throughout the process. Firstly, we engaged SWIFT to equip our staff through an intensive training module, which lasted for about a week and helped our staff get familiar with the new ISO20022 standard. After that, we could actually implement ISO20022 within five or six months only, and we are now ready to go live.”
Lisa O’Connor, Managing Director, Capital Markets and Standards, APAC, SWIFT commented: “For more than ten years, ISO 20022 has been widely adopted as a standard for funds distribution and processing as it allows for interoperability, richer data and straight-through processing. We are delighted that Clearstream and The Stock Exchange of Thailand decided to leverage ISO 20022 and SWIFTNet capabilities to design their link and we strongly believe it will bring benefits to all their investors.”