Can International Securities Identification Numbers (ISINs) become the foundation for unique product identifiers (UPIs)? The new Derivatives Service Bureau (DSB) which will allocate ISINs for over-the-counter derivatives, appears to think so. It also thinks that it might be the organization issuing the UPIs, although it is willing to work with others. If such a scenario […]
SEC’s Liquidity Rule: How to Bucket Your Assets
Highly liquid, moderately liquid, less liquid, and illiquid. Classifying securities in one of those four buckets for the first time under the US Securities and Exchange Commission’s new liquidity rule will force compliance and risk managers at US mutual funds and exchange-traded funds to implement new operational procedures by next year. “Fund managers will have […]
SEC Reporting Rules: Fund Managers’ Recon Challenge
The US Securities and Exchange Commission uses the word modernization when speaking of its new reporting rules for registered investment fund advisers, but that’s not how asset managers see things. They dread the approaching tsunami, according to panelists and attendees at a recent TSAM North America fund management event held in New York. Fund managers […]
New Tax on US Convertible Bonds: Taxing Air?
The US Internal Revenue Service wants withholding agents to collect tax on upticks of the rights of convertible bondholders, despite protests that the levy is nothing more than “tax on air.” That’s how some tax attorneys and operations specialists view the IRS’ Section 305(c) rule on taxing adjustments to the conversion ratio of US convertible financial instruments, as […]
Accounting Rule Upends Contract Management
A new global accounting rule that changes the way revenue is recognized and disclosed on financial statements is going to give fund management firms, financial technology shops and data providers a lot more stress. Contract management, financial reporting, IT, legal counsel and even human resource directors will have to work together more closely than ever […]
Alternative Funds Industry Tackles Data Culture
Chief data officer (CDO) may not the most sought-after position at hedge fund management shops, but that isn’t stopping the C-level executives from pushing hard to create a better data management culture — including finding someone to take on the role, with or without the title. To support this effort, a new group calling itself the Data […]
Dole Class Action Ruling: Short-Selling Clawback Next?
US brokerage and bank operations and compliance managers will soon have to face an onerous back-office and legal challenge — figuring out how to make short sellers pay back $2.74 plus interest for each share of Dole Foods shorted more than three years ago. That money would be used to compensate beneficial investors who are considered the […]
Pre-Release ADRs: More SEC Fines on the Way?
First ITG. Who is next? That is the question fund managers and other investors are asking themselves after learning that the US Securities and Exchange Commission fined broker-dealer ITG $24.4 million for violating regulations on how it used the pre-released shares of American Depositary Receipts (ADRs). The SEC says that ITG violated Section 17(a)3 of […]
Judge’s Ruling Questions Attorney-Client Privilege for Mutual Fund Trustees
Independent mutual fund trustees will likely think twice before they say anything incriminating to their external legal counsel about how they administer mutual funds. The rights of mutual fund investors to fair advisory fees trump the rights of independent mutual fund trustees to attorney-client confidentiality, says a Washington State federal district court judge in a […]
No Shortcuts Reimbursing NAV Errors Says SEC
The US Securities and Exchange Commission’s recent $3.9 million settlement with social investment manager Calvert Investment Management highlights the operational challenges — and potential legal liabilities– faced by mutual fund companies that must equally compensate all investors for any errors in net asset value calculations . It isn’t enough to make a best effort. Fund […]