Will You Be MifID II Compliant? Impact on Non-EU Asset Managers

Will You Be MifID II Compliant? Impact on Non-EU Asset Managers

There is a misconception that if your firm is a US asset manager, then you don’t need to worry about MiFID II, when in reality you do. Even if your firm doesn’t have a physical presence in the EU, there may be components of the rule that are still applicable to your client mix or your asset classes.

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Will You Be MiFID II Compliant? Five Areas of Focus

Will You Be MiFID II Compliant? Five Areas of Focus

Slow down! That was the number one request that IMP heard after our webinar, MiFID II: US Asset Managers Brace for Impact.

IMP heard you, loud and clear. As a result, we’re rolling out a slower, more detailed video series to help you to either prepare for the January 3rd deadline, or educate yourself on the basics of what this massive directive entails.

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MiFID Who? Three Immediate Areas Where Non-EU Compliance Teams Need to Pay Attention

MiFID Who? Three Immediate Areas Where Non-EU Compliance Teams Need to Pay Attention

If you’re in compliance, specifically with a Non-EU asset management firm, you may be prepared to sit back and enjoy the show that MiFID II has produced among those firms servicing clients in the European Union. It can be hard enough to keep up with the ever-changing landscape of regulations at home, never mind keep an eye on what goes on across the pond.

However, don’t get too comfortable just yet. With refinements being released as recently as July, MiFID II seems to always have something new in store. Compliance professionals need to understand the changes taking place in the front, middle and back office as well as the potential impact to the systems that support them. To some firms, this has meant strengthening the role of the compliance officer in anticipation of increased regulatory scrutiny.

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The Rise of MiFID II: Does it Apply to You?

The Rise of MiFID II: Does it Apply to You?

If you work for a US Investment Management firm, and are celebrating the notion that MiFID II won’t apply to you, it’s time to take off the party hats, and give this directive a second glance. MiFID II may just apply to you after all. This series, authored by IMP Consulting, will walk you through the highlights of the directive, and help to guide you in identifying how your firm may be impacted.*

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Will Canadian Investment Advisors (IAs) Survive With Changing Regulations? How Technology Solutions are Coming to the Rescue

Will Canadian Investment Advisors (IAs) Survive With Changing Regulations? How Technology Solutions are Coming to the Rescue

Significant changes to Canadian financial regulations in the last few years have made Investment Advisors (IAs) question whether they will be able to survive in the new environment, yet technology is providing the answer. The regulatory changes improve the client’s experience by ensuring a minimum standard of care as well as an increase in transparency. 

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The Third Avenue Fund: A follow up

On December 15, we blogged about the struggles that some high yield funds were having trouble with honoring redemption requests. One of them, the Third Avenue Focused Credit Fund, in lieu of cash,  had taken steps to provide its shareholders with interests in a trust that would be used to liquidate the fund’s assets once it had been closed down. Since that time, the Fund has come to an agreement with the SEC, permitting it to postpone honoring redemption requests until it can liquidate the fund’s assets in orderly fashion. 

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The Best of IMP’s Blog in 2015

If you’ve been following IMP’s blog over the last year, you’ve seen our team of experts leverage their hands-on industry experience to share information and insight on relevant topics ranging from compliance to implementation to “managing” managed service providers. 

We’ve taken a look at the ten most popular blog posts of 2015 and provided our subscribers with the list below in case you missed one or you would like to read it one more time. If you’re new to IMP’s blog and wish to subscribe for 2016 please click to subscribe.

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Compliance at a Glance: Rule Setup Errors

At IMP, we see every day examples of how uncontrolled library growth, inadequate scrutiny and inconsistent interpretations of client guidelines can cause errors and missed violations that risk monetary and reputational loss for CCOs and compliance teams. 

Without a rigorous, annual testing of the automated compliance rule library and supporting data, the results portfolio managers and compliance teams rely upon are statistically likely to harbor error rates of 25% or more. In fact, we find that between 25% and 40% of the coding backing these systems is, on average, incorrect - a fact that shocks compliance teams.

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Crash and Burn: What Investment Management can learn from the Aerospace Industry

On my way to work a few months back I drove past a software development firm I had never heard of. I was curious, so I found them online and looked at what they did. The firm developed QA automation software specifically for aerospace airborne systems. What struck me as interesting is that this QA Automation tool not only helps to automate, manage, and document testing, but it also helps their customers become compliant, certified, and safe so that they can receive FAA approval. It makes sense; with today’s aircraft that are heavily dependent on avionic hardware and software, it could mean the difference between life and death. For those that might be interested in it, it's called DO-178C, Software Considerations in Airborne Systems and Equipment Certification.

As a flight instructor in my spare time, all things related to aviation are interesting to me, so I kept digging into this certification process to see if I could relate it to the investment management technology arena. As I read on, I could not help but think to myself, “why does the investment management industry not have similar types of specific software certification when it comes to trading and compliance applications?” Having worked for two software vendors that never had the terms “certified” or “compliant” come up in the design and testing phase. These systems, however, manage and transact trillions of dollars a year for investment managers.

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A look into the future: What may the SEC have in store for Rule 38a1?

As with all business decisions, there are pros and cons to implementing a major change to the way that your firm’s operations work. With today’s trend towards outsourcing to managed service providers in the front-office, such as OMS and compliance systems, the obvious upside is that asset managers are able to refocus their energies away from the day-to-day operation of their systems, with the downside being that transparency into systems is lost. With that being the case, if asset managers do not have a clear grasp of their provider’s process and controls, they risk losing money, clients, their reputation, and perhaps their company. Do you want to be in this press release in the future?

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Are you CLEAR on Whistleblower Requirements? What does it mean to be eligible for a reward?

Since the Whistleblower Rules (Section 21F of the Securities Exchange Act of 1934) went into effect on August 12, 2011, the Securities and Exchange Commission (“SEC”) has awarded 15 whistleblowers. Payouts have totaled nearly $50 million out of an investor protection fund established by Congress in Section 922 of the Dodd-Frank Act. 

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Compliance Automation – If the Gears are Grinding, “We Hear You”

Much like the sounds that our cars make as it steadily declines into a small fortune of repairs, trading compliance libraries also notify us when it’s on the verge of breaking down. Like cars, many people see their trading compliance library as a self-contained machine. As long as the car gets us to our final destination, or in this case, the compliance reports run on a daily basis and pre and post-trade compliance is runningthe system is working and the investment team can safely traverse the market without worrying about a trading problem. However, when we look under the hood, the compliance automation is actually an interaction between the automated rules, the data and trading. When those three key gears are properly moving together, we see a well-oiled machine. When one or more of the gears is grinding, we need to figure out what’s making that noise before we end up with an old jalopy that is destined to break down at the worst possible time.

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Maintaining your compliance rules library: Four things that you should be doing and probably aren’t

Maintaining your compliance rules library: Four things that you should be doing and probably aren’t

Often, once a project is completed, and a system has moved to a business as usual, or “live” status, many think that all of the detailed work on the rules library has been completed, and that a minimal amount of additional work needs to be performed going forward. This, however, can be a high-risk path to follow. Maintaining your rules library is crucial to keeping your system running smoothly from both a technological and operational standpoint. Doing so will also help reduce your regulatory and client satisfaction risk.

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Bad Data – The Black Mold of the Industry

Bad Data – The Black Mold of the Industry

I’ll admit it, I am addicted to HGTV.   In particular, I love the shows about renovation.  You can buzz in and out of the room folding laundry or unloading groceries, and just really be in front of the TV for the “big reveal,” which is when the renovation is done and the homeowners get to see the results.  My favorite show, “Love it or List It” has homeowners choosing to stay in their homes, post-renovation (“love it”) or sell their homes (“list it”) for something better that they have found.

No contingency:  The homeowners typically have an older home, and they set a firm budget for the renovation, which they cannot possibly go beyond.  The designer then begins the plan, with glowing descriptions of how she will achieve everything on the owners’ “must have” list, and stay within the budget.

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