Transactions "Awaiting Settlement"

Hi all

Just wondering how it can be that, as of 10/06/22, I still have transactions “awaiting settlement” dating back to 01/06/22.

Many thanks in advance…

Hi Mark,

Hope you are well.

Sometimes a late settlement can occur due to unforeseen circumstances. This can affect any investment provider. We recognise late settlements are an issue and we have prioritised eliminating it for the future.

We welcome all feedback, as we are always looking to improve our service and offering, so please feel to get in touch if you ever have any questions.

Hope you have a lovely day.

@OmarRizeq Looking from a different angle, at the issue of some transactions taking a while to settle, would it be technically possible to re-balance a portfolio that still has outstanding transactions, either by leaving these transactions out of the re-balancing exercise or re-balancing them regardless?

it should be technically possible to sell a position before it’s settled – as long as IE are able to sort out all the settlement risks

I have conflicting emotions here. What is a fair time-frame to consider something being done in a reasonable time or whether something is just plainly taking the piss?

Having that in mind, I have two transactions going on to two weeks stuck on “Awaiting settlement” Not so much the vendor itself as I have other Invesco ETF’s and they settle quickly. The two I have that’s letting me down are “Invesco FTSE RAFI UK 100” and “Invesco FTSE RAFI All World 3000”. What’s going on here?

To rub it in further, the following statement is as useful as a beef spit-roast at a vegan convention:

"You can’t rebalance your portfolio until previous trades have settled.
Trades typically take 2 days to settle after they are executed in the market.
If you have any questions, please contact us through the Help Centre."

Let the blame game begin…

Join the (seemingly quite large) club.

Hi guys,
I have notified the relevant team on the above comments, I will come back to this message first thing on Monday. If you message the help centre directly I’ll make sure to highlight when I speak to the team.
Sorry for any frustration caused.
Mark

WTF!?! 41 days and still not settled? This is seriously taking the piss. Somewhere someone is not doing the job they’re paid to do.

@markl23 You might as well sell those and replace them with Vanguard USD Corporate Bonds or something else similar.

Hi everyone,
As you know, I’ve updated the relevant team on the above problem, I’ll have an answer for you tomorrow, again sorry for any inconvenience caused.
Mark

1 Like

Hi all,

I wanted to post an update after speaking with the team on the issue concerning unsettled transactions.

Why are you, as a customer seeing this issue?

  • We use registered Market markers on the London Stock Exchange (LSE) to place all our ETF trades; these providers allow us to achieve the best execution for our trades.
  • However, due to the generally lower volumes and values for many of InvestEngine’s trades, it’s not always practical for our Market makers to fulfil these orders immediately (or within the expected two days time frame. They often group trades together and manage their book of orders.
  • It is important to understand that the prices are locked in once we’ve made the trade; if the price goes up or down, you are locked into the price at the execution time. However, we have seen a delay in the settlement/delivery of shares.

What is InvestEngine doing about it?

  • Firstly, engaging with our market makers - to make sure they settle more of our trades on time. As we get bigger, this is becoming less of an issue.
  • Secondly, working to eliminate the impact on our customers. We will be changing our trading rules to allow customers to sell those holding impacted (without waiting for settlement). This will eliminate the practical issues customers are experiencing not being able to sell and rebalance.

This solution is actively being worked on as our top priority - we need to ensure we’re still meeting our regulatory obligations with segregated client funds and assets being held in client nominees on CREST, so it’s not as straightforward. But we believe we’ll be able to provide an update in the coming few weeks which we will share with the community first.

We do understand your frustration with unsettled transactions, and we hope to have this sorted very soon,

Mark

5 Likes

Thanks Mark, it’s much appreciated (and refreshing) to get a window into the details of what is happening behind the scenes.

May I suggest that you alter your text in FAQs:

“Typically, your trades will settle two days after execution (‘T+2’), although in some rare cases it can take longer.”

Purchase of 5.253172 Vanguard USD Corporate Bonds 1-3 Years @ £43.79. External Ref = IO00224215
Purchase of 0.733573 iShares USD Treasury Bonds 7-10 Years @ £158.35. External Ref = IO00224357
Purchase of 0.003341 iShares USD Ultra-Short Bonds @ £83.35. External Ref = IO00225709
Purchase of 0.002030 iShares USD Treasury Bonds 7-10 Years @ £156.58. External Ref = IO00225781

8 or 9 days on all of the above now…

1 Like

Why is it that only InvestEngine appears to have this issue when other “competitor” platforms does not have it? If others do have it, then they deal with it in the background which does not affect the Investors potential actions and thus they are not even aware of it.

As far as I am concerned this should not be my problem at all and I should not be affected by this. However, it directly affect me as I cannot utilise the fancy Rebalance Portfolio option while I still have these awaiting settlement nonsense hanging over me. After all, and I quote: “…It is important to understand that the prices are locked in once we’ve made the trade; if the price goes up or down, you are locked into the price at the execution time.”

Therefore I should be able to rebalance my portfolio any time I wish to whether there are still transactions waiting for settlement or not.

Frankly this knocks the the faith and confidence I have in the platform down a notch or two even though I invested in the platform itself…

Since 13/07/22

Purchase of 0.002030 iShares USD Treasury Bonds 7-10 Years @ £156.58. External Ref = IO00225781

Hi @UncleBob

Sorry for the delayed response. This issue around settlement can get quite complicated. I’ve tried to weigh up what best to share, I don’t want too heavy on the technical details. Not sure I’ll get the balance right — but let me try.

Why is it an issue on IE

There are two main contributing factors:

  1. How we trade. We place your trade with the market/LSE market makers (Some competitors trade OTC i.e. not involving the London Stock Exchange and counterparties. Others may use a dedicated broker.) We trade this way for a number of reasons; namely cost, choice (of securities we can access) and best execution (ensuring we get the best price and liquidity for the ETFs at the volumes we’re trading)

  2. Size of our trades. Some of the ETF trades are still comparatively small due to the specific ETF popularity and size of orders — this will improve as InvestEngine continues to grow and won’t affect the heavily traded ETFs

Why is it affecting the Rebalancing option

You’re right in saying that you shouldn’t be affected by settlement. The issue is that we’re not able to sell trades without the settled assets which affects the current solution.

What are we doing about it

  1. Working closely with our LSE counterparty to prioritise settling your trades

  2. Developing a solution where we can aggregate our ‘Buy’ & ‘Sell’ settlements with our counterparties — meaning we can enable sell trades (+ rebalancing features etc) on our side

Operationally, this is our number one priority. We’ve had further recent constructive developments and I hope to be able to provide more information in the coming weeks. Thanks for your patience and for getting in touch.

3 Likes

Thanks for the explanation!

At this stage it looks like it just a few ETF’s that’s regularly the culprit and in my case it is always Invesco FTSE RAFI UK 100 and Invesco FTSE RAFI All World 3000 that does not settle along with the others. The majority of others settle within days.

Call me old-fashioned, but I’d like overall transaction settlement to be more or less in line with the info provided in the Help section on the website, otherwise remove the paragraph which states, “Typically, your trades will settle two days after execution (‘T+2’), although in some rare cases it can take longer.”

Since 13/07/2022

Purchase of 1.587238 iShares MSCI EMU Small Cap @ £206.70. External Ref = IO00197549