UCITS III
A highly automated, “plug and play” OTC solution, independent daily valuation & risk reporting.
- February 2007 - European Union UCITS III directive reduces
barriers, allows mutual funds to invest in a wider range of funds
including derivatives
- UCITS III implications
- fund infrastructure upgrade
- OTC processing complexity
- independent daily valuation: risk requirements*
- time to market ambitious reporting.
The Mutual Fund, Custodian Bank Challenge
Mutual funds and custodian banks share the challenge of in-house accounting engines struggling with both the volume and diversity of the new and/or different types of positions coming on stream, i.e. derivatives, leverage and the borrowing of both cash and securities. Being UCITS Ill-compliant requires a robust, scalable, high-quality middle- and back-office infrastructure that can be costly and time consuming to develop in-house. Significant IT and resource investment is required to upgrade in-house systems – many of which are spreadsheet-based - and provide sophisticated OTC processing and risk reporting services. It is a new, complex and rapidly expanding territory in which few mutual funds or custodian banks have extensive experience.
As an industry leader in OTC processing GlobeOp's UCITS lll service package combines GoOTC ™ and GoRisk® Reports, two well-established services that offer:
- standardized data and processes to minimize operational and settlement risks
- independent, transparent, web-based valuations
- document and collateral management
- settlement
- comprehensive daily risk reporting
- online access to critical data for fund risk managers and financial control teams
- customized reports including position, liquidity and exposure; scenario analysis and stress test limits; correlation analysis; and value-at-risk (VAR).
GlobeOp's UCITS lll solution: Client benefits
- more quickly take advantage of derivative market opportunities
- resolve trade processing infrastructure challenges
- respond to regulatory requirements
- increase their focus on generating returns
- benefit from a proven, scalable infrastructure
- reduce technology-related investment while continuing to access leading edge innovations
* Funds remain ultimately responsible for regulatory compliance, the specifics of which can vary from country to country.
Updated September 2008