How does banking work - Asset class bank accounts and Fund Control bank accounts

How does banking work - Asset class bank accounts and Fund Control bank accounts

Clearmatch  deals with investor funds being held in one bank account that resides in the fund control instance of Clearmatch and another bank account that holds the funds for the asset class where borrowing occurs. When transactions are processed in any asset class, funds are transferred between the bank accounts to avoid the investors needing to have money in each asset class. 

Finance agreement drawdown disbursement paid to borrower






Payment Received from the borrower



Bank Interest on uncleared funds. When borrowers make payments and the funds are waiting to be cleared, the bank interest will be accrued in the asset class bank account. The system will record this uncleared bank interest accrued against each investment and when the bank interest received is capitalised, the correct interest accrued will need to be transferred to the correct bank account. This is due the fact that an investor, example Westpac bank, can have their own funds reside in a different bank account to the rest of the investors. When the bank interest received is paid over it has to be done to the correct bank accounts. The following will be done to achieve this:

  1. When the “payment received” transaction occurs in the investment it will increase the “uncleared balance”.
  2. The “Transfer Debit” transaction that takes place in the investment and the corresponding “Transfer Credit” transaction in the fund account, when a payment is received where the funds are moved from the investment to the customers fund account occur following the clearance period (days to clear funds on the finance company system settings business rule. This is “working days” i.e., taking the calendar into account and counting only working days i.e., dates that are not a public holiday and not a weekend). The money will be held for the clearance period to cater for possible dishonours. 
  3. After the clearance period (days to clear funds on the finance company system settings business rule, This is “working days” i.e., taking the calendar into account and counting only working days i.e., dates that are not a public holiday and not a weekend) the “Transfer Debit” transaction will take place in the investment account and it will reduce the new “uncleared balance”. The corresponding “Transfer credit” transaction will take place in the fund account.
  4. While the money is being held in the investment, bank interest received will be accrued on this amount at the interest rate of the asset class bank account. This accrued interest will appear in the investment as a “uncleared balance interest accrued”  transaction. This accrued value is an accrual and as such will not affect the balance as this stage and will remain in the investment until the bank interest capitalisation date.
  5. On the bank interest capitalisation date a transaction “uncleared balance interest” will take place and decrease the accrual and increase the “uncleared balance”.
  6. Bank interest received is paid over X days after the bank interest capitalisation date. When this occurs a transaction “uncleared balance interest payment” will take place and it will decrease the “uncleared balance” and :
    1. A direct credit bank transaction will take place to move the cash from the asset class bank account and place it in the fund bank account.
    2. In the fund account a ‘Interest” transaction will be raised to reflect the interest in the fund account. The narrative will clearly indicate that the interest has been earned in “investment account” so that we can see which interest is earned in the fund account and which is earned from investment accounts.

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