Prior to the availability of the Babel Vestima+ service, it was not possible for clients on the Vestima+ service to perform automated trading into UK based funds. Such trades had to be instructed manually, via fax or telephone, directly to the UK fund manager and required the receiving fund manager to manually enter them on their own registry system and also to manually record their confirmation of the trade via the Vestima+ Browser based interface.

This manual processing introduced much greater scope for error and also increased costs by requiring different, time intensive processes for UK funds than for other offshore assets.

Bravura's Babel Integrator intelligent messaging platform is widely deployed by financial institutions to transform the format of messages from a variety of industry standard bodies  or from proprietary sources into a format that can be consumed by the systems of its customers. It also performs the reverse transformation for responses back from it customer's systems.

But to serve Luxembourg based funds effectively, Bravura decided to partner with eBRC, an information security and data management company that serves various banking institutions in Luxembourg. Together they now use the Babel software in ‘bridging mode' between Vestima+ and EMX so that Babel effectively acts as a relay between the two platforms, translating the message formats between the two platforms as required. This is offered as a service to the financial industry from the data centres of eBRC, which complies with the legal and security standards set by the Luxembourg regulator CSSF (Commission de Surveillance du Secteur Financier) and has Luxembourgish PSF (Professional Sector Finance) accreditation.

Since going live in August 2008, the new Babel Vestima+ service now allows investors to hold UK assets on the Vestima+ platform and trade and settle them electronically as if they were offshore assets. The automation of this process via Babel has eliminated the need for manual processing together with its attendant risks, and also decreased costs by reducing the number of different processes employed to process transactions.

Finextra verdict: Despite efforts in recent years to create a borderless investment funds market in Europe, fragmentation of market infrastructures and a lack of automation have continued to act as a brake on the industry’s development. Babel Vestima+ provides a valuable service to help investors benefit from automation without upfront investment in infrastructure.