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 […]
Fighting Financial Crime: Making Due With the Omnibus Account
A bank or broker-dealer opens an account in its name with a securities depository. One of its customers — a fund manager, broker-dealer or other firm — is involved with either money laundering activities or violating regulations involving sanctions against an individual, country or corporation. Even worse, one of their clients did the dirty deed. […]
BNY Mellon’s NAV Snafu: What Was and Wasn’t Learned
When technology glitches take place, cleanups can be embarrassing and messy to say the least. When it comes to critical applications they can be downright dangerous as well. The recent case involving the possible mispricing of over one thousand mutual funds and exchange-traded funds valued at over US$400 billion by BNY Mellon using SunGard Financial’s […]
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 […]
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, […]
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 […]
Europe’s Target2Securities: On Target or Not?
Will T2S launch as scheduled? Nine years after the European Central Bank proposed the initially controversial idea of launching a single centralized settlement platform for domestic and cross-border European securities transactions, the plans to launch might have hit a snag. It wouldn’t be the first time, but this time it would be at the 11th […]
DTCC Embraces ISO 20022 for Corporate Action Elections
Depository Trust & Clearing Corporation’s corporate actions transformation project could well become a gamechanger for the US market by including the use of ISO 20022-compliant messages for elections, as well as notifications on corporate events. Beyond the obvious reduction of operational risk in the stickiest aspect of corporate actions processing, the expanded use of ISO […]
Crime Prevention: Breaching the Veil of Omnibus Accounts
For operations and compliance professionals, the definition of financial crime is rapidly expanding to meet the threats of cyber crime, but the more common threat is money laundering or fraudulent wire transfers conducted by unscrupulous companies or individuals. For depositories and custodian banks, this traditional abuse of the financial system has acquired an additional level of […]