Mutual Funds
Outsourced UCITS llll solution for OTC
processing,
independent daily pricing and risk reporting
The European UCITS lll directive enables mutual funds intent on preserving or increasing returns to lever and participate in the over-the-counter (OTC) derivatives market. In return, the directive requires mutual funds to provide independent daily valuation and risk reporting.
However, many funds are often unable to enter the OTC derivatives market quickly because their, or their custodian banks’, internal trade processing systems are inadequate or over-stressed due to
- Capacity constraints vs. increasing OTC trade volumes
- Inefficient processing of complex OTC derivatives, e.g. multiple counterparties and trade data file formats
- Excel spreadsheets too cumbersome to be an effective platform for OTC complexity or volume, e.g. daily post-trade cash reconciliations
- Non-compliance with the directive’s independent valuation and risk reporting requirements.
GlobeOp is an OTC derivative processing specialist. We provide a proven, outsourced “plug and play” solution that enables mutual funds to more quickly take advantage of derivative market opportunities. A tailored, integrated combination of GoOTC™ and risk services supports the entire post-trade process:
- resolves infrastructure challenges
- provides independent daily valuation and risk reporting for over-the-counter (OTC) derivatives
- highly automated middle- and back-office service package
- robust, scalable infrastructure
- independent, transparent, web-based OTC valuations, document and collateral management, settlement and daily risk reporting services.
- supports compliance with regulatory requirements for independent and daily valuations and risk analytics
- increases a fund’s ability to focus on generating returns, while benefiting from a proven, scalable infrastructure and reduced technology-related investment.
UCITS lll service package - Overview
GlobeOp’s UCITS lll service package for mutual funds and custodian banks combines two well-established services.
GoOTC™
A highly automated, well-established ‘plug and play’ solution for complete OTC processing, GoOTC incorporates standardized data and processes to reduce operational and settlement risks related to inaccurate trade entry, reconciliation and liquidity. In addition, GoOTC provides seamless online access to critical data for fund risk managers and financial control teams.
GoRisk® Reports
To help funds demonstrate their ability to monitor and measure position and portfolio risk whenever necessary, as required by UCITS lll, GoRisk Reports provides a comprehensive ASP risk reporting service. Reports, which can be tailored to specific fund requirements, include: position, liquidity and exposure; scenario analysis and stress test limits; correlation analysis; and VAR.
The package can be enhanced with the addition of GoQuote,™ a web-based front-end pricing consolidation service for illiquid, manually priced OTCs. GoQuote enables OTC derivatives traders to efficiently view, manage and analyze formatted electronic price messages and bid/offer spreads on a single, user-specific grid. GoQuote can be refreshed in real-time, enabling traders to identify new opportunities and understand changing risk exposure.