Settlement transaction types
REDM: Redemption (Funds)
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REDM marks the settlement of a redemption of fund units: the investor delivers units back to the fund, usually against cash. The code is meant for the funds industry only.
- Code
- REDM
What REDM means
When an investor redeems fund units that are held in a CSD or with a custodian, the units are delivered to the fund’s transfer agent or settlement agent and cancelled, and the redemption proceeds are paid. The unit movement carries REDM.
The opposite flow is SUBS. ETF redemptions by authorised participants use ETFT, and in-specie redemptions paid out in securities use INSP for the securities leg. REDI is a different code, for withdrawals from specified sub-accounts.
When you see it
- On unit deliveries from custodians and platforms to a fund’s transfer agent after a redemption order.
What to do next
- Use REDM only for units redeemed by the fund. Selling units to another holder is TRAD.
- Check the market’s accepted list: Clearstream’s CSDR codes annex for the UK (CREST) notes that REDM will not be available for user input once CREST’s penalties functionality is introduced.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT540, MT541, MT542 and MT543: sequence E (SETDET), field 22F,
:22F::SETR//REDM. The SETR qualifier is mandatory, so every instruction carries one code (format:4!c/[8c]/4!c; with a data source scheme a proprietary code may be sent instead). - Repeated in the confirmations MT544, MT545, MT546 and MT547 (sequence E,
:22F::SETR//REDM) and in the MT548 status advice (sequence B, where SETR is mandatory when the sequence is present). - Optional in the statements: MT536 subsequence B1a2 and MT537 subsequences B2b and C2.