Transaction cost analysis — an everyday discipline in the equities and fixed-income markets referring to the total expense involved in completing a transaction — is now becoming more important to swaps players who need to reap the same benefits as their traditional investment peers. Unfortunately, the US$650 trillion swaps market remains dismally behind other markets, leaving […]
Bloomberg’s FIGIs: Can Data Giant’s IDs Usurp ISINs as Global Standard? (Updated)
ISIN — the 12-digit alphanumeric international securities identification code and longstanding standard for identifying securities for cross-border trading and post-trade processing — is facing an unlikely competitor, a proprietary code designed by commercial data giant Bloomberg. The 27-member board of directors of the Object Management Group (OMG), an international organization concerned with data integration standards, is set to […]
Outsourcing the CIO Role: A Rigorous Exercise in Matchmaking
In an increasingly complex environment of regulatory mandates and investment options, endowments, foundations and pension plans are taking a tack widely accepted in the post-trade communications market: outsourcing the critical functions of a chief investment officer. “They [asset owners] can easily create an investment policy — what they will or won’t invest in — but when it comes […]
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 […]
Unified Managed Accounts: MMI Resurrects the Model Messaging Hub
Asset managers can start looking forward to an industry-standard way to communicate with sponsors and overlay management of unified managed accounts (UMAs). Resurrecting the hub concept announced with much fanfare by the DTCC in 2011 and quietly abandoned by the US infrastructure giant the next year, a replacement is in the works through a collaboration between the Money Management […]
Institutional Investors: Sniff Testing a Hedge Fund Manager’s Operations
Due diligence. It’s the homework institutional investors do when selecting fund managers as part of their asset allocation process. The selection process often resembles a courtship, with one exception. The investors– typically pension plans, endowments, non-profits and insurance companies — have the upper hand. If they aren’t satisfied with what they hear– and feel — […]
IBOR: Navigating the Options for a Dream Position Engine
As fund managers struggle to increase their investment returns, reduce their costs, and satisfy growing regulatory demands they are quickly embracing an old concept — data management — albeit with a new twist. Implementing the so-called investment book of record, or IBOR for short, has become a de facto requirement for fund managers who need […]
Bitcoins: What Compliance and Operations Experts Should Know
Bitcoins may sound like just a passing fad to compliance and operations specialists at fund management shops, but they would be foolish to presume that bitcoins won’t be part of their operations, and possibly soon. As the virtual currency gains momentum, they will need to brace themselves for new world of regulatory oversight. In recent weeks bitcoin has received […]
Automating Corporate Actions: Four Ways to Generate Successful ROI
Automating the handling of corporate actions should be a given, considering the financial risk fund managers, broker-dealers and banks face if they make just one mistake. Apparently that’s not necessarily so. The reason: justifying the expense to C-level management isn’t as easy as it sounds, despite the need for automation being greater than ever before. […]
Plan Sponsors: Take Charge of Forex Trading Costs
Watch the watchers. That’s the mantra of a growing number asset owners, who are depending on fund managers and custodians to protect their financial interests. These asset owners are now adopting — or should be adopting — a “trust but verify” philosophy when it comes to choosing who executes and how their foreign exchange transactions should be […]