The alternative investment funds market is undergoing an eight year itch. That long ago in 2007, a group of securities depositories, fund administrators and custodians launched a project to create ISO 20022-compliant message types for orders and redemptions of units of alternative investment funds. The level of adoption of the new messaging was disappointing, and it […]
US T+2 Settlement: The Long Journey Officially Begins
What a difference a day makes. Until September 16, the US financial industry had only been talking about a two-day settlement cycle. Only a preliminary roadmap of the stepping stones to T+2 had been completed, indicating that at least 30 operational workflows will be affected, requiring rule, behavioral and technology changes. On that day Securities and Exchange Commission […]
BNY Mellon’s NAV Snafu: What Was and Wasn’t Learned
When technology glitches take place, cleanups can be embarrassing and messy to say the least. When it comes to critical applications they can be downright dangerous as well. The recent case involving the possible mispricing of over one thousand mutual funds and exchange-traded funds valued at over US$400 billion by BNY Mellon using SunGard Financial’s […]
Basel III: How Hedge Fund Managers Must Leverage Prime Brokers
“How important is this relationship to you?” That question is often asked by concerned spouses or romantically involved parties to get a status check on just how well their relationship is faring. For the first time ever, hedge fund managers could be forced to pose the same question to their prime brokers, thanks to the […]
Swap Positional Identifiers: Buy-Side Group Positions Industry Standards
A fund manager executes an order for a swap contract with a broker-dealer counterparty on a swaps execution facility (SEF), then allocates the order to separate underlying funds and clears the trade through a clearinghouse using a futures commission merchant (FCM). At the end of this process, the fund manager might report the trade to […]
UCITS V: What Is a Three-Year-Old Bonus Worth?
Fund management firms wanting to benefit from the latest incarnation of decades-old UCITS legislation to easily market their investment funds across Europe will find themselves facing a new hurdle: they must adapt to new restrictions on how and when they compensate many of their top-ranked executives. The provisions on compensation are considered draconian by many fund experts who […]
AML Transaction Monitoring: Five Steps to Getting it Right
If you think your anti-money laundering transaction monitoring software isn’t working correctly, what should you do? a) blame your vendor and replace the software b) blame your analysts and tell them to work harder c) review your data feeds and inputs d) throw your hands up and think you can’t do anything e) doubt your […]
Investment Research: Broker-Dealers Have Their Own Unbundling to Do
Fund managers may not be the only ones forced to unbundle payment for trade execution from research when the new incarnation of the European Markets in Financial Instruments Directive (MiFID) takes effect. Broker-dealers will be facing a similar challenge and they could be just as unprepared. Ordinarily classifying the research they provide fund managers as “value add” […]
Operational Due Diligence: Right Questions, Right Answers
Do you have a policy to prevent cyber breaches? Do you allow employees to work remotely? Do you have a policy for valuing hard-to-price assets? Do you allow multiple parties access to your compliance system? Do you have a procedure to mitigate risk? Look familiar? These are questions drawn from questionnaires that asset-owners — pension plans, […]
Commission Unbundling: What Price Is that Research in the Window?
It’s a given that fund management firms should pay for research — aka the ideas and analysis — that helps them make decisions on whether or not to buy or sell a particular stock or bond and when. Yet the European Commission now wants to put their spending on research under the regulatory microscope. A new […]