Oversight Pointers: Fund managers will soon have practical guidance for best practices in overseeing outsourced operations contracts with custodian bank, fund administrators and other post-trade service providers. The ISITC, trade group representing operations specialists from over 100 buy and sell-side firms, is publishing a white paper with its recommendations in the fall. The guidelines, ISITC officials […]
Central Clearing for US Sec Lending: Coming Soon?
Central clearing: it’s a well-established concept for settling equities, fixed-income and now swap transactions. But not in the US securities lending market, where Eurex Clearing now wants to establish a new service, but could face an uphill climb, despite enlisting two of the world’s largest custodian banks BNY Mellon and State Street to help out. Granted, OCC in […]
Growing Global Collateral Pool: Will Fund Managers Profit?
With collateral potentially becoming a scarce resource over the next few years, securities depositories are quickly stepping up to the plate to ease access, but it remains uncertain just how much their new services will help the most needy: fund managers. The announcement of the alliance between two mega market infrastructures — international securities depository Euroclear in […]
Fund Managers: Raising the Operational Bar for Uncleared Swaps
With regulators on both sides of the Atlantic wanting bespoke swaps trades to fall under new margin guidelines, fund managers can ill-afford to sit idly by and rely simply on the negotiating skills of their legal advisors to come up with the best terms possible. Buy-side firms will need bring the so-called uncleared swap transactions […]
DTCC Puts Defrosting of Issuer Chills on Hold: Now What?
By all appearances, it’s back to square one for US corporate issuers when it comes to dealing with the Depository Trust & Clearing Corporation and the manner in which it imposes minor or more severe restrictions on a newly public company accessing some or all of its services. Any possible future changes in DTCC’s adjudication of so-called […]
Europe’s T+2 Settlement: Bond Trades Hardest Hit?
With about thirty European countries moving to a two-day settlement cycle next month, concern is starting to mount that the fixed-income market will trail its equities counterpart in meeting the shorter timetable, leaving fund managers and broker-dealers to pay a heftier cleanup bill than initially anticipated. Securities depositories responsible for settling domestic and cross-boder transactions say that they […]
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 […]
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 […]
AIFMD and UCITS V: Custodians Under the Gun to Monitor Subcustodians
Global custodians always claimed to be selective about who they did business with. After all, billions if not trillions of dollars worth of client assets are at stake. Well now they have to be even more cautious about who they have selected as their subcustodians or local agent banks across the globe, and many are […]
Latin America’s MILA: Solving Settlement Quagmire
Mercado Integrado Latinoamericano, or MILA, sounded like a great idea. Announced in September 2009 and launched in May 2011, the initiative was supposed to bolster trading volumes in three stock markets, which historically languished in the shadows of Brazil and Mexico. The exchanges of Colombia, Chile and Peru would become the new Euronext. Or so […]