TreasurySpring, the London-based financial technology company, have launched their Fixed-Term Fund (FTF) platform which employs a completely new financial instrument, conceived, designed and built by TreasurySpring, to unlock the multi-trillion dollar wholesale money markets by providing new digital pipelines to connect cash-rich firms to institutional borrowers from the sovereign, bank and corporate sectors.
FTFs for holders of cash balances
FTFs enable all holders of large cash balances, from corporates to charities, private funds to insurance companies, family offices to private banks and beyond, to reduce and diversify risk on those balances, whilst simultaneously increasing returns. What TreasurySpring does in the FTF is to put a sort of “fund wrapper” round the source of the fund so it can be sold as a security. This enables companies or organisations that cannot buy securities because of treasury policy or don’t have any of the legal administrative arrangements to buy securities direct, e.g. a company can buy a 1-month T Bill and can redeem it when needed with no risk.
For investment-grade firms seeking financing, TreasurySpring’s FTF platform provides flexible, low-cost access to a diverse universe of new short-term funding sources as shown below:
Source & Copyright©2019 - TreasurySpring
FTF - first material innovation since MMF
An FTF shares many of the characteristics of a term deposit, in that it is a term product that can be acquired without the need for any infrastructure. However, instead of providing exposure to unsecured bank risk, as with a deposit, an FTF can offer exposure to any short-dated, investment grade fixed-income obligation, such as a single government bill, a single secured bank loan or a single investment-grade corporate loan, for example.
TreasurySpring buys the T-bill for example on your behalf, wraps the “fund wrapper” around it, the company owns the FTF and can redeem it as when required.
Tim Howell, former CEO of Euroclear and investor in TreasurySpring commented "I believe we are looking at the first material innovation in this space since the creation of money market funds in the 1970s.”
Accessing the platform
The FTF platform can be accessed directly via TreasurySpring’s cloud-based web-portal which has been designed to integrate easily into other platforms via secure APIs, making it straightforward to interact with cash investors, issuers, portals and treasury management systems.
Development and ramp-up
Since issuing the world's first FTF in June 2018 in Beta phase, clients from multiple sectors have purchased more than $400M of FTFs across a broad range of new products, with more than $300M of issuance in 2019 already which confirms that not only does the platform works, but that the regulatory infrastructure, the pipelines to funds, etc, and the procedures all operate seamlessly together.
Kevin Cook, co-founder and CEO, TreasurySpring, said:
- “The public launch of our online platform is the culmination of three years work to build the financial, operational and technological infrastructure necessary to deliver truly digital pipelines that connect cash-rich investors to institutional borrowers. Through these pipelines, we are democratising access to the wholesale money markets, enabling every holder of large cash balances to invest them in the same way as the most sophisticated financial institutions. We designed our FTF platform in response to clear and repeated demand for cash investment alternatives - alternatives that allow investors to risk less but earn more – and we are delighted to now be able to deliver simple, standardised, regulated products to meet that demand.”
Justin Meadows, founder and former CEO of NEX Treasury and investor in TreasurySpring commented:
- “When Kevin and his partners first explained the concept behind Fixed-Term Funds to me back in 2016, I knew that they were onto something special. FTFs are a simple but powerful tool that can add value to treasury teams of all shapes and sizes; and with the ease of onboarding and execution through their new online portal, I expect to see the speed of adoption continue to grow rapidly over the coming months and years.”
CTMfile take: The combination of the new easy to use instrument, the FTF, and the immediate availability of the investment through an online platform is very impressive. It is truly a major improvement for investors worldwide.
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