The data management community could potentially learn a lot about standardisation from the world of performance measurement, suggested Corné Reiners, head of both FSC performance measurement and data management at Robeco Asset Management, to delegates to TSAM in London this week. A lot of cooperation has been achieved within the area of performance measurement between asset management firms and this led to the development of Global Investment Performance Standards (GIPS), which have achieved great traction in the market, he contended.
Last week, interdealer brokerage firm Tullett Prebon announced it had entered into an acquisition agreement for an undisclosed amount with derivatives valuation services provider OTC Valuations (commonly known as OTC Val). Paul Humphrey, CEO of Tullett Prebon’s Electronic Broking and Information division, explains to A-Team Insight that the acquisition is all part of the firm’s drive to service the complex end of the valuations market.
The International Swaps and Derivatives Association (ISDA) has this week pledged its support for the establishment of global central repositories for OTC derivatives data and its commitment to the provision of relevant transaction data to supervisory authorities. The promises were made in a letter that has been sent to the heads of the primary supervisory authorities of each of the regulated signatories, which include buy side firms such as BlueMountain Capital and Goldman Sachs Asset Management and sell side firms such as JPMorgan and Citi.
Kinetic Partners has added a new face to its team, ex-RBS Portfolio Risk Services MD Christian Szylar, to lead the vendor’s efforts in the risk modelling and valuations space. The vendor has been stepping up its approach to the market by touting its modular approach to risk management as a more practical way to meet new regulatory requirements, such as those under UCITS IV, and is hopeful that Szylar will boost its chances of success.
In a move that may allow the practices of the world of pricing and valuations to become more harmonised globally, the Securities and Exchange Commission (SEC) has indicated it is keen for a single set of high quality globally accepted accounting standards to be implemented. To achieve this goal, the regulator has finally begun to put words into action and has kicked off an evaluation process about what needs to happen to narrow the gap between US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS).
A third of the 50 hedge funds involved in a recent survey commissioned by Omgeo and conducted by Greenwich Associates have invested in improving their valuations and accounting systems, with many more focused on reducing counterparty risk. The fallout from the financial crisis and the intense regulatory and client scrutiny of the hedge funds market has inspired these funds and their managers to invest in their technology infrastructures to improve their risk management and transparency, according to the survey.
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
In order to assist the European financial services community in its attempts to improve liquidity risk management, the Committee of European Banking Supervisors (CEBS) has published a new consultation paper on how to go about producing an effective allocation mechanism for liquidity costs, benefits and risks, CP36. The recommendations are aimed at providing firms with a framework upon which to build internal pricing mechanisms to price liquidity risk and to align liquidity risk management culture across their organisation via suitable incentives, which are likely to include significant data gathering and technology requirements.
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