CIBC Mellon Launches Platform-Traded Fund Solution on NEO, Enables New Low-Cost Canadian Investment Fund Distribution
PTFs transact at end-of-day net asset values, simplifying fund transaction and administrative processes, enabling cost and efficiency benefits to asset managers and dealers as they introduce new opportunities for investors seeking lower-cost fund transactions.
TORONTO, Oct. 4, 2019 /CNW/ - CIBC Mellon today announced the launch of asset servicing for platform-traded funds™ (PTFs™) on NEO Connect, a new low-cost distribution channel accessible to all investors, asset managers and their dealers who want more efficient and lower cost transactions in assets not listed on a stock exchange. PTFs are typically a class or series of an existing investment fund that investors can buy or sell on the NEO platform, NEO Connect, at an end-of-day net asset value (NAV) per share/unit. CIBC Mellon collaborated with NEO and other industry players to create the first platform-traded fund process in this made-in-Canada solution.
"The Canadian investment industry continues to innovate in response to investor demand for lower-cost solutions. Platform-traded funds are key step forward in enabling new efficiencies in administration and distribution," said Ronald C. Landry, Head of Product and Canadian ETF Services, CIBC Mellon. "We are pleased to support our clients by helping them simplify the PTF administration process and deliver new cost-efficient fund solutions for Canadian investors."
"We are pleased to collaborate with CIBC Mellon and a number of its investment fund clients in providing an innovative, and efficient solution that enables investors to access an array of management strategies," said Jos Schmitt, President and CEO, NEO. "With our recent expansion into the mutual fund dealer community, PTFs continue to grow in popularity with advisors and investors."
CIBC Mellon was joined by representatives from Canadian PTF sponsors Invesco, NinePoint Partners and Stone Asset Management to celebrate the launch of this offering by opening the NEO Market on Friday, Oct. 4.
PTF Benefits
Platform-traded funds trade at NAV per share/unit through a market and are designed for investors with fee-based accounts who are seeking low-cost, managed portfolios. Key benefits of CIBC Mellon's asset servicing solution include:
- CIBC Mellon acts as a clearing and settlement agent, leveraging connectivity with NEO to enable investment fund providers to create platform-traded classes of their funds.
- Using a NAV eliminates the impact of bid-ask spreads, and reduces administrative work associated with unique pricing for each transaction.
- Dealers and their advisors are able to trade in bulk, which allows them to place PTF purchase and redemption orders across multiple client-accounts simultaneously.
- A more efficient trade settlement process can lead to lower managed expense ratio (MER) compared to other fund classes and transaction types.
- Fees are not based on thresholds, meaning the same fees are applied to all transactions, regardless of size.
- The streamlined solution also means reduced administration, as there is no intra-day liquidity and no in-kind subscriptions or redemptions.
About NEO
NEO Connect is a platform that streamlines the distribution of financial assets to investors. Launched in May 2016, NEO Connect is accessible to investors, asset managers and dealers who want more efficient and lower cost distribution for assets not listed on a stock exchange. An initial test trade can be organized and executed within 24 hours. To arrange a test or learn more, contact the NEO investor helpline toll-free at 1-844-567-6424 or visit: https://www.aequitasneo.com/en/connect/neo-connect
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About CIBC Mellon
CIBC Mellon is a Canadian company exclusively focused on the investment servicing needs of Canadian institutional investors and international institutional investors into Canada. Founded in 1996, CIBC Mellon is 50-50 jointly owned by The Bank of New York Mellon (BNY Mellon) and Canadian Imperial Bank of Commerce (CIBC). CIBC Mellon's investment servicing solutions for institutions and corporations are provided in close collaboration with our parent companies, and include custody, multicurrency accounting, fund administration, recordkeeping, pension services, exchange-traded fund services, securities lending services, foreign exchange processing and settlement, and treasury services. As at June 30, 2019, CIBC Mellon had more than C$1.9 trillion of assets under administration on behalf of banks, pension funds, investment funds, corporations, governments, insurance companies, foreign insurance trusts, foundations and global financial institutions whose clients invest in Canada. CIBC Mellon is part of the BNY Mellon network, which as at June 30, 2019 had US$35.5 trillion in assets under custody and/or administration. CIBC Mellon is a licensed user of the CIBC trade-mark and certain BNY Mellon trade-marks, is the corporate brand of CIBC Mellon Global Securities Services Company and CIBC Mellon Trust Company, and may be used as a generic term to refer to either or both companies.
For more information, including CIBC Mellon's latest knowledge leadership on issues relevant to institutional investors active in Canada, visit www.cibcmellon.com.
Media Contacts:
Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, [email protected]
Adam Bornstein, NEO
[email protected]
905-505-2540
SOURCE CIBC Mellon
Media Contacts: Brent Merriman, Corporate Communications, CIBC Mellon, 416-643-5065, [email protected]; Adam Bornstein, NEO, [email protected], 905-505-2540
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