A new research report authored by Morgan Stanley and consultancy Oliver Wyman has resurrected the debate over how some of the world’s largest custodian banks will need to rethink their time-honored strategy. Gathering more assets from more clients won’t be enough to sustain profitability. Earnings are under pressure from low interest rates and a historical […]
FINRA’s TBA Margin Rule: No Meeting of Minds with Industry
The pleas of fund managers and broker-dealers for the Financial Industry Regulatory Authority (FINRA) to change proposed rules requiring the collateralization of agency mortgage-backed securities and other transactions are falling on deaf ears and time is running out. The SEC is requiring that final comments on FINRA’s new proposal published last month be submitted by […]
Fund Managers: On Countdown for New Uncleared Swaps Margins
US banking regulators might not have directly overseen the activities of fund management shops in the past, but when it comes to uncleared bilateral swap contracts, that stance is changing fast. The new arrangement will come at a hefty cost for heavy users of the bespoke deals. Under final rules released October 22, a host of […]
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 […]
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 […]
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, […]
Fund Managers: Fixing EMIR Reporting Glitches
Now that more than a year has passed since they’ve had to deal with new reporting requirements under the European Market Infrastructure Regulation (EMIR), fund managers are belatedly waking up to the fact they could soon face whopping regulatory fines for not submitting correct data on their derivative transactions to accredited trade repositories. Regulatory operations […]
News to Use: EquiLend, 4sight and Russia’s NSD
Match, Game On: Borrowers and lending agents in securities transactions executed through EquiLend, an electronic trading platform, will now be able to reconcile far more transaction details and enable lending departments to work smarter. Although EquiLend’s new matching engine is still geared to US and foreign securities, the company expects it to have greatest uptick in […]
News to Use: ISITC, BNY Mellon, Custom House and More
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 […]
FinOps Takes a Byte out of the News — 3/17/2015
A few news items that may be of interest to our readers… CalPERS Pioneering: US pension giant California Public Employees Retirement System (CalPERS) has become the first pension plan to join a fully committed repo facility at Chicago-headquartered derivatives clearinghouse OCC. The repo facility provides contingency liquidity in the event of a member default or […]