How did the idea for order routing come about?
Order routing is the foundation on which Calastone has completely transformed the global funds industry. When we launched the network in 2008, all order flow for investment funds was conducted manually via phone, email and fax. This resulted in significant cost and risk for the industry, generating less value for the end investor.
We founded the network on the principle of addressing this fundamental issue. It was ground-breaking, resilient and globally scalable; it slashed industry costs overnight and created a new benchmark. We have continued to evolve and invest in our technology, and with our Distributed Market infrastructure we can now do more than ever.
What is order routing and how does it work?
Order routing automates and digitalises the fund trading process across the globe, including subscriptions, redemptions and switches. Through one connection into Calastone, clients can seamlessly connect with over 2,600 participants across 47 markets, regardless of what existing technology or infrastructure they operate on.
We give clients a full real-time view of all trading and position data through our network, enabling them to reduce time, risk and cost when transacting funds. Through our Order Routing technology we can connect clients across the entire value chain, not just from the fund manager to the distributor, but also through to custodians and transfer agents.
We also don’t just connect participants with external counterparties, but within their own organisations to help generate further efficiency.
At Calastone we are focused on delivering a highly resilient infrastructure that our global network of users and really depend on. We proactively monitor our client connections and support the implementation of secondary links, including APIs. We also have full business continuity and capacity management processes in place. With no downtime, clients have the peace of mind that the network will be operating regardless of circumstance.
Finally, clients have 24-hour support from our Operations team, regardless of the market in which they operate. In fact, our Operations team have a first line fix rate of 95%.
What benefits do users typically see?
Calastone Order Routing eliminates any manual processing, saving the time, cost and risk.
In addition, avoiding events such as a loss of connectivity, system outages, lost information, is key as an inability to respond appropriately can result In damage to a firm’s reputation and even regulatory scrutiny.
Whether firms are looking to provide greater investor protection, enhance their disaster recovery (DR) process or just have peace of mind that your business is supported; we enable this as standard by offering multichannel connectivity.
This is something we see becoming the industry standard in the future. Not only does it provide fund firms with a layer of protection in the event of a part of their technology stack falling over, but if they are using multiple ways to send their fund orders and one partner does suffer an outage then they have a backup route to get their trades into the market.
What does automating order flow mean for the funds industry?
By automating and digitalising the fund distribution process, Calastone Order Routing is empowering the industry to evolve their business models, generate scalability and deliver value back to the end investor.
Through the power of connectivity, we are linking the entire industry together, enabling frictionless trading, ensuring that firms can give their investors the assurance that trades are being sent in a timely, risk-free way.
This whole of market connection via Calastone eliminates the need, cost and time for clients to develop, test and maintain multiple connections to each of their trading partners. Further, it protects market participants from costly industry and counterparty change, allowing them to focus their resources on improved customer service and revenue generating opportunities.
What is required to implement order routing?
Our clients find that implementing Order Routing is straightforward and seamless, with no need for upfront development of IT investment. We simply agree your connection and format, test it and then go live in as little as three days.
How do you see the landscape for orders developing in the future?
We are now live in 47 countries, processing over £200bn per month, and continues to expand globally. As well as our coverage growing, we are investing in our technology and infrastructure. With our Distributed Market Infrastructure, the capabilities and potential of the network will grow exponentially. Across our breadth of solutions, we automate across the entire fund lifecycle.
Calastone helps firms think smarter and shape their businesses for the future. We let you focus your energy on building investor brand loyalty. After all, in an industry that manages people’s money, trust is vital.