Secondary Market

In the world of investing, the secondary market plays a crucial role, and its importance is evident in the Hanseatic Sustainable Residential Real Estate Fund, even though the fund is not listed on a stock exchange. The secondary market is where investors buy and sell securities they already own, as opposed to the primary market where securities are first issued. This market is vital for providing liquidity and enabling price discovery for securities, including those of investment funds like Hanseatic.
The Hanseatic Fund, registered in a securities depository, benefits significantly from the secondary market. This registration facilitates easier trading of the fund’s units, allowing investors to buy and sell their holdings outside traditional exchange mechanisms. This aspect is particularly important for a fund not listed on an exchange, as it provides a platform for investors to liquidate or increase their investments as needed.
One of the key features enhancing the security and efficiency of these transactions is the Delivery Versus Payment (DVP) system. DVP is a settlement process where the delivery of securities occurs simultaneously with the payment. In the context of the Hanseatic Fund, this means when investors decide to buy or sell units, the transfer of these units and the payment are executed concurrently. This system, facilitated by the securities depository, ensures that both parties in the transaction – the buyer and the seller – are protected, reducing the risk of default.
The integration of the Hanseatic Fund into the secondary market through the securities depository and the application of the DVP mechanism highlights the fund’s commitment to providing a secure, transparent, and accessible investment environment. This approach not only enhances investor confidence but also underscores the fund’s dedication to maintaining high standards of transactional integrity and investor convenience.