“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 […]
The Volcker Rule: Managing the Seven Deadly Metrics
The implementation of the Volcker Rule has undoubtedly caused wailing and gnashing of teeth among some of the smartest and best-funded trading operations in the world. While its overarching principle — the prohibition of proprietary trading — might be easy to understand, proving compliance is a whole different ball of wax. With the effective date […]
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 […]
Recent SEC Compliance Fines: What to Watch Out For
Four recent enforcement actions by the US Securities and Exchange Commission each highlight a different area of concern by the regulatory agency and each sends a loud and clear message in hefty fines and professional punishment. We think they offer valuable lessons to readers of FinOps Report on how to steer clear of legal landmines. Conflict […]
Best AML Programs Hinge on Best Models
Market, credit and operational risk. It has become common practice for financial firms to measure, monitor and reduce each of these three categories using accepted models, or methodologies, which rely on data inputs to generate the correct results necessary to make the right decisions. Unfortunately, the same doesn’t apply to money laundering activities even though […]