Once viewed strictly as a matter of matching up cash, positions and transactions, the middle-office task of reconciliation is quickly moving into the trade-execution and post-trade space. The reasons are self-evident: not only are regulators demanding better control of operational risk, but C-level management are requiring more precise analysis of the bottom line for each unit. “It’s all […]
What to Do When the CFTC Gets Into Your Phone Calls
A new requirement from the Commodity Futures Trading Commission (CFTC) that all oral communications on some over-the-counter transactions be recorded, could end up being technologically and economically unfeasible. In its role as overseer of the burgeoning US$650 billion swaps market — a designation assigned by the US Dodd-Frank Wall Street Reform Act — the CFTC […]
Middle Office Takes Center Stage in Hedge Fund Valuation Fiasco
A recent fine of US$9 million the US Securities and Exchange Commission levied against a UK hedge fund advisor and its former US holding company shows the operational risk faced by alternative investment funds when middle-office controls fail to correctly handle the signs of a bad valuation. The settlement, announced on December 9, 2013 arose […]
FATCA: How to Reduce Ops Risk
At the core of FATCA is the need for foreign financial intermediaries to know and report whether securities accounts are owned by US persons who are deliberately trying to avoid paying their correct share of US taxes.In fulfilling the rules of FATCA, the US legislation designed to catch US tax evaders, financial firms would be […]