The web of complexity being spun by global regulation is driving asset managers to try and attain greater automation and operational efficiency. This is especially true with respect to fund registration. This means that there is a lot of filing work to do in different jurisdictions, different languages, different countries. The bigger the manager and the more funds they are distributing in to different markets, the bigger the challenge. As asset managers broaden their distribution footprint and passport their funds in new markets, the fewer systems they have to manage the better.
Why February is often a stressful period for the asset management industry.
As those who run UCITS funds know all too well, doing an annual update for the UCITS Key Investor Information Document (KIID) each February is a significant task.
It might, on the surface, appear to be a relatively straightforward 2- or 3-page summary document detailing the fund’s charges, risk & reward profile, past performance (including end of 2017 figures) and the overall objectives and investment policy.
Trying to manage data from several different vendors in multiple systems is both manually and cost intensive. It is, in many ways, an analogue approach to doing business in a digital world. But it needn’t feel like a Sisyphean task.
The Quest for Efficiency
With MiFID II now formally introduced, alongside PRIIPS, UCITS V and AIFMD, there are many regulatory hurdles for asset managers to overcome. Now is the time to focus on efficiency and ways to optimize one’s registration and distribution processes.
As digital technology advances, it is ushering a new era of transformation; one that is set to bring huge efficiency gains for asset managers. The Fund Registration system was built in order to improve the efficiency of asset managers. The main goal being that asset managers, big or small, need not feel overwhelmed trying to master the minutiae of global market regulation for passporting and distributing their fund(s). Moreover, it is effectively in ‘compliance-ready mode’ at all times.
The Integrated Solution
The integrated registration and fund distribution solution helps to simplify the way managers’ passport their funds and remain in full compliance with the regulations. It has clear advantages, as the asset manager will never feel alone vis-à-vis the mountain of regulatory requirements.
The benefit of having an integrated solution is that we can easily produce the new KIID at the start of each year and file it directly to the regulator; this immediately saves stress, time and money relieving the pressure on managers.
What else can you gain from our solution? We make sure the fund passporting is done in a timely and efficient manner, and that compliance is assured at any given time. We offer an analysis of local regulation and best practices to help clients develop a sustainable distribution strategy and maintain compliance in all of the fund’s countries of distribution. We have an extensive network with regulators and industry associations which allows us to anticipate change and adapt our system in time to be ready for any future change.
This is all predicated, of course, on quality of data. Just like with any system, the outputs one generates are only as good as the inputs.
Taking that task off asset manager’s shoulders isn’t an easy task; quite the opposite. Our focus on providing clean and accurate data has led to the appointment of a Chief Data Officer, who will assume responsibility and ensure that KNEIP continues to be a leader in data accuracy.
The KNEIP Solution
We believe that our solution helps to demystify the complexity of fund passporting, and presents clients with simplicity.
This is the reasoning behind having a regulatory-focused, centralised tool for asset managers to have a clear overview of their fund distribution footprint. It closes any gaps they might have by giving them information on whether a fund is not being sold in a market when it should be, or vice-versa.
One can think of it as a bit like an airline flight path map, which shows each and every market a manager’s funds are passported in. Users can go down to the share class level and if they want to register their fund in a new market, they simply use a drag and drop tool. The rules-based system running in the background then takes care of the rest.
Large clients appreciate having this single interface where they can see what is happening for all of their fund ranges, at any point in time.
Smaller clients, on the other hand, won’t necessarily have the internal resources or the time to keep a hand on the details. They might only have one fund being sold in a handful of countries and no need to follow the details. We have a full range of services that can cater to their needs and willingness, whether they want the detailed view or just reassurance that they’re covered.
Our solution can help maintain the competitiveness of UCITS funds and AIFs for the global market. At the same time, we see a trend towards the harmonisation of regulation across countries globally. This presents a great opportunity for innovation with streamlined processes, and greater control in order to focus on what’s important.
If you’d like to learn more about how we at KNEIP can assist you in gaining greater efficiency in your fund management strategy, or for any further information click below.
By Antonello Argenziano