Sketchy information on annual meeting agendas or corporate actions announcements is not going to plague investors in Russia equities in the future. Nor will fund managers risk losing money as many do today, because the operational difficulties discourage them from participating. Russia’s corporate actions reform has given the country’s national securities depository National Settlement Depository (NSD) the […]
Clearing the Decks for Uncleared Swaps Margins
Asset managers might not be affected by the new margin requirements on uncleared swap transactions for at least a year. Nonetheless, they are slowly starting to prepare for the inevitable legal and operational teething pains. US banking regulators and the Commodity Futures Trading Commission (CFTC) have decided that effective September 2016 or March 2017, depending on […]
Custodian Banks: New Landscape, New Strategies
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 […]
Europe’s Revised Settlement Regime: Still Problematic?
Just who is responsible for fixing a securities transaction which fails to settle on time? a. the securities depository b. the custodian of the injured counterparty c. the injured trading counterparty d. all of the above The European Securities and Markets Authority, the pan-European regulatory agency, recently decided that the answer should be switched from […]
Securities Finance Data: Useful or Not for European Regulators?
In asking market players to shed more light on their securities finance transactions, European regulators have unintentionally opened an operational and legal can of worms. The newly passed European Securities Financing Transactions (SFT) legislation includes a requirement that managers of new European traditional and alternative investment funds disclose their policies involving securities finance transactions in […]
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 […]
Target2Securities: Are Fund Managers Paying Enough Attention? (Updated)
(The information in this article was updated on December 11 to reflect the European Central Bank’s new changes to the T2S migration timetable). When first envisioned in 2008, Target2 Securities (T2S) was hailed by the European Central Bank as a single settlement platform to reduce the post-trade processing costs associated with domestic and cross-border European securities […]
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 […]
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, […]
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 […]