23 January 2015


No need to visit a fortune-teller: fund reporting requirements will grow. For alternative investment funds, this year only there are three more reporting dates still to come. It’s high time you got ready to face them.
In the coming years reporting requirements are bound to increase and those already implemented are bound to change. Fund managers have no choice but to comply, meaning that operational setup will consume a lot of time, resources and result in higher costs.
Investment fund managers must therefore carefully consider how they will implement regulatory reporting requirements, and approach this constant change with a more long term and strategic mind-set. AIFMD reporting requires data feeds from many data sources within the investment fund’s eco system.

Read also: Is the AIFMD discouraging non-EU AIFMs from marketing in Europe?

Our Regulatory Reporting Team Leader, Armann Gudmundsson, gave us some insight into his contact with asset managers implementing AIFMD: “Over the past year some asset managers have taken full advantage of the AIFMD project to observe and analyse future challenges the industry might face. They have taken a close look at where their data originates, how accessible it is and how reliable the source will remain over time”. Here are some of their findings:

  1. The industry as a whole needs to improve data management: from what data is captured and how, to the way it is organised and maintained.
  2. Data management process is often not applied consistently from the initial data entry to its output. Consequently, data may fit well for some uses, but not for others.
  3. Data capture at the source is often disconnected from output requirements, and how the data will be used for from a regulatory reporting perspective.
  4. Most have struggled with the data needed for the AIFMD transparency reporting. This often stems from the fact that data is either missing, not considered as important in the past, or that the necessary codification to connect data coming from different data providers is not in order.
  5. All have struggled with the multiplicity of sources of the data required for the AIFMD transparency reporting. In all cases, the data needed to gather for the reports is not available in one location.

What does all this mean in practice? The problems begin at the very source, where data is initially captured and recorded in data systems. The correct approach would already at this stage take into account possible output needs and a more flexible usage of the data. This would ensure that elements captured are granular enough to retain flexibility towards output needs, hence, enabling data to be adapted to meet different requirements. If this is not thought through carefully from the outset, asset managers and their data providers put themselves at risk of drowning under the ever-increasing reporting obligations.
*The official reporting deadline is January 31, but I bet you prefer to have it finished on Friday.

Read Also: AIFMD reporting 3 times quicker: making it happen

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