Euroclear UK & Ireland and EMXCo have launched their joint service to provide automated settlement to the UK funds industry.

The system has been in development for a number of years but has now gone live and the firms revealed that a number of companies – including Brewin Dolphin, Cardale and Charles Stanley - have already signed up to use the service.

EMXCo and Euroclear UK & Ireland “worked closely” with the UK Fund Liaison Group in creating the system and are “fully confident” that the service will meet market requirements, according to Yannic Weber, CEO.

“What is more, we are live now. And firms active in UK funds are already testing our new processing arrangements.”

Currently, much of the settlement process in the funds industry is automated.

Peter Fleming, head of UK Investment Administration at Skandia, said that the announcement was “great news for the industry” and added that his firm supports the move.

The launch comes in the same week that cross-border transaction network Calastone revealed plans to provide an alternative settlement system to the Euroclear offering by the end of the first quarter of 2010.

Dan Llewellyn, head of market standards at Calastone, told ISJ.tv at the time that the Euroclear service had a number of drawbacks, including that it was based on CREST, a settlement system designed for the equity market.

“The approach has been, over the last three years, to manoeuvre the funds market to a system that is already in existence and in some respects is not conducive to a primary market model,” he said.