The goal of the US Securities and Exchange Commission’s new proposed rules for swing pricing for mutual funds may be noble, but their potential implementation is already causing plenty of strife, say operations insiders. A swing price, according to the US regulatory agency is an adjustment to the net asset value, based on a huge purchase […]
Automating Corporate Actions: Fund Managers Trail
The more things change the more they stay the same when it comes to corporate actions processing. Although financial firms as a whole are adopting more automation to communicate with each other and investors on income and dividend payments as well as reorganizations such as mergers, tender offers and takeovers, fund managers are trailing their sell-side peers, […]
SEC to Mutual Funds: Get Your Liquidity in Order
New proposed rules from the US Securities and Exchange Commission requiring mutual funds to ensure they have the necessary liquidity and correct pricing to accommodate a potential onslaught of redemptions could pose operational and IT challenges for fund management firms. That is the initial reaction from a group of ten fund management compliance, operations and […]
New Alternative Fund Messages: Second Time the Charm?
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 […]