Reconciliation: it’s an everyday process in buy- and sell-side shops, where overworked middle-office analysts pay close attention to details and hope technology works. Like all post-trade operations, it often draws the attention of C-level executives only when something goes wrong. Even worse, as evidenced in a recent case involving Merrill Lynch, mistakes can also elicit […]
Catching a Money Laundering Thief: Combing Data in a Tower of Babel
Looking at the multitude of employment ads placed by executive search firms and large global banks, it becomes clear that the world’s biggest financial institutions are spending lots of money hiring new staff to combat potential money laundering and other illegal activities. It’s an understandable kneejerk reaction to what has been an onslaught of mega financial […]
Fund Managers: Picking the Best Clearinghouse, Intricate Juggling Act
Fund managers can no longer afford to view clearinghouses as stodgy infrastructures which just exist for the sake of servicing mega broker-dealers and banks. With regulators now requiring far more transactions — particularly in the over-the-counter derivatives market — to be processed through clearinghouses, asset managers must realize they have some choices to make and […]
Russia Sanctions: Narrow Focus Makes Compliance Trouble
Asset managers have to deal with trading restrictions against countries on U.S. or foreign sanctions lists every day. Trading with certain countries or in issues from certain companies is forbidden, period. The black and white requirements are clear to understand so they are easy to follow. Not so, when it comes to the new sanctions imposed by the U.S. government […]
Unified Managed Accounts: MMI Resurrects the Model Messaging Hub
Asset managers can start looking forward to an industry-standard way to communicate with sponsors and overlay management of unified managed accounts (UMAs). Resurrecting the hub concept announced with much fanfare by the DTCC in 2011 and quietly abandoned by the US infrastructure giant the next year, a replacement is in the works through a collaboration between the Money Management […]
Hedge Fund Managers: The Big Headache of Healthcare Reform
FinOps takeaway: Your count of “full-time employees” may not be what the IRS says it is. Mainstream attention on the controversial US healthcare legislation has focused on how difficult or financially affordable access to health insurance may be for individual people. For employers, there is a far larger and only slowly emerging story in the huge difficulty and cost they […]
Fund Managers: Addressing the Regulatory Data Quagmire (Updated)
Dodd-Frank. EMIR. FATCA. AIFMD. Solvency II. The reporting obligations of fund managers just keep growing. The snowballing burden — with new regulations and reporting rules popping up at an alarming pace — is forcing many to step back from their usual resigned willingness to learn and follow one regulatory rule after another. The emerging alternative: looking at the bigger picture of […]
Monitoring Proxy Advisory Firms: A New Compliance Challenge?
Proxy advisory firms are supposed to help fund managers decide how to vote their shares in annual or other corporate meetings and even cast votes for them. But that doesn’t mean fund managers should just let them do all the work and forget about it. Apparently that’s what the US Securities and Exchange Commission thinks […]
Institutional Investors: Sniff Testing a Hedge Fund Manager’s Operations
Due diligence. It’s the homework institutional investors do when selecting fund managers as part of their asset allocation process. The selection process often resembles a courtship, with one exception. The investors– typically pension plans, endowments, non-profits and insurance companies — have the upper hand. If they aren’t satisfied with what they hear– and feel — […]
CLS Case Raises Bar for Business Method Patents, Sort of
When can a financial method be patented? a) Always b) Never c) Sometimes d) Don’t Know If you answered sometimes, you would be legally right. If you answered don’t know, you would be practically correct. Based on a recent US Supreme Court decision involving the global operator of a mega foreign exchange settlement system, financial software developers […]