(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 […]
US Swing Pricing: Getting the Process Right
The US mutual fund managers may soon be following in the footsteps of their European peers in adopting swing pricing, but how ready are they to overcome the operational and compliance challenges? If the tone of discussions at a recent standing-room-only event hosted in New York City by the Association of the Luxembourg Fund Industry (ALFI) is any indication, the answer is […]
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 […]
Harmonizing ISO 20022 Messages: Only Best Efforts Apply
Understanding unfamiliar accents and dialects can be hard, even if you come from the same country and supposedly speak the same language. Imagine how users of ISO 20022-compliant messages must feel as they struggle to process the current variants of the up-and-coming messaging standard. Their solution: create ISO harmonization groups and hope they can reach […]
FCMs: Fund Managers Swap One Cost for Another
Fund managers can no longer assume all is well in their relationships with their futures commissions merchants. As many face changing or even lost relationships with their FCMs, the big question they are forced to answer: What do we do now? Their choices: either find another FCM, reduce the number of centrally-cleared swaps transactions they trade, or […]
Playing With Swing Pricing: Tough Choices for US Fund Managers
The goal of the US Securities and Exchange Commission’s new proposed rules for swing pricing for mutual funds may be noble, but their potential implementation is already causing plenty of strife, say operations insiders. A swing price, according to the US regulatory agency is an adjustment to the net asset value, based on a huge purchase […]
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, […]
US High Court Asked to Address Rights of Unclaimed Account Holders (Updated)
(Editor’s Note: On February 29, 2016 the Supreme Court decided not to hear the case involving California’s unclaimed property statutes on the grounds the “convoluted history” of the lawsuit made it unsuitable for appeal to the US high court. However, Justice Samuel Alito warned that state unclaimed property laws could face a serious constitutional challenge […]
SEC to Mutual Funds: Get Your Liquidity in Order
New proposed rules from the US Securities and Exchange Commission requiring mutual funds to ensure they have the necessary liquidity and correct pricing to accommodate a potential onslaught of redemptions could pose operational and IT challenges for fund management firms. That is the initial reaction from a group of ten fund management compliance, operations and […]
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 […]