A rules-based approach to digitizing fund registration

“Even the most complex processes can be distilled to a set of pre-defined rules and variables. It is in this mindset that KNEIP successfully launched a fund registration solution that helps demystify the complexity of fund passporting, and presents clients with simplicity.”

Setting the scene

Last year, KNEIP commenced work on the identification of client processes best suited to Robotic Process Automation (RPA). I wrote in an article, at the time, that using computer software (‘robots’) to learn, replicate and perform mundane, repetitive tasks such as data mining, could liberate the minds of asset managers. Initially, I felt that some processes were too complex to be automated. Such was their aura of mystery, I thought, they could only possibly be run by experienced individuals. But upon further investigation, I arrived at a different conclusion: namely that even the most complex processes can, in fact, be distilled to a set of pre-defined rules and variables. Once in place, the rules-based process could, in theory, become a candidate for automation.

Demystifying fund registration

It was with this same mindset that KNEIP looked to develop a fund registration solution last year; the first digital product to launch on our new platform. Why, we asked, could the complexity of fund passporting not be simplified, and automated, for our clients (via our system, not via RPA) by establishing a set of rules and variables? People would have you believe that fund registration and distribution is rocket science. ‘It is too complex!’ they shout. But it’s not impossible. Provided you put the right rules in place, you can achieve similar advantages to those using RPA. Rather than view this as insurmountable complexity, we see it as a set of rules that need to be decoded. People thought it wasn’t possible to use RPA for automating payroll, payment processing and so on; that has been disproved. We think the same applies to fund distribution, using rules to drive automation and improve our clients’ efficiency. This culminated in the successful launch of our Fund Registration solution on KNEIP digital platform earlier this year. It is a software solution that we believe helps to demystify the complexity of fund passporting, and presents clients with simplicity. Thanks to the rules inherent within the system, clients need not feel overwhelmed trying to master the minutiae of global market regulation for registering and distributing their fund(s). Once a client sends us an instruction, the platform will automatically prepare the necessary documentation, based on the data already provided to KNEIP. If any document is missing, they will automatically see what information they need to provide. Moreover, KNEIP digital platform is effectively in ‘compliance ready mode’ at all times. We offer analysis of local regulation and best practices to help clients develop a sustainable distribution strategy and maintain compliance in all of the fund’s counties of distribution. To further build on this rules-based system, we plan to launch a MiFID II solution later in the year and, over time, add distribution analytics, market analysis and a number of other tools to support clients’ passporting needs.

Take inspiration

Back in 2011, we launched a solution for regulatory filing. In building this channel to the regulators, many of the rules that have ultimately gone into our Fund Registration solution were already encoded. Over time, we have fine-tuned those rules. What we have now done with the launch of the Fund Registration service is to add a layer of managed services, whereby we take away the complexity that normally comes with using other channels for regulatory filings. We do the regulatory filing as a sub-set of the Fund Registration solution. In the background, whenever any rules are missing, or they get changed or updated to reflect changes in the market, the system automatically adjusts so that the client always remains compliant: and free from stress.

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