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The Trading Mesh

Streamlining and Simplifying Portfolio and Compliance Reporting

Wed, 21 Mar 2012 15:42:51 GMT           

Investment management firms are among those facing an uphill climb to conform to the regulatory requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  While legislators and lawyers are still busy sorting through the details of the controversial legislation, it is clear that reporting rules will be more stringent, requiring more transparent disclosure by asset managers.

Here are a few of the issues that will impact investment management reporting:

- To reduce systemic risk, regulators will require firms to provide more comprehensive information, and have it available on demand
- To the fullest extent possible, this information will need to be real-time or near real-time
- To comply with the above trends, firms will need to identify solutions that enable them to provide an enterprise wide view of activities, positions, and risk

Complying with these new regulatory requirements will be expensive, but will be less so if investment management firms can implement an enterprise-wide approach that provides the flexibility to conform to the rules of today as well as to an unpredictable tomorrow.

This enterprise-wide approach must capture data from various internal applications and external sources, then standardize the data and make it available on demand in an easy-to-access format.   Compliance requires that the data be accurate, complete, and timely.

How market data from the cloud can help compliance reporting

This restructuring of data management procedures is obviously a huge undertaking, but today’s cloud technologies make compliance with Dodd-Frank regulations more manageable.  Cloud-based data management systems offer a centralized repository that enables a holistic, firm-wide view of risk exposure, available to all key stakeholders over the internet instead of across several closed proprietary systems.

Once this type of data management system is in place, the next step is to obtain the necessary referential and pricing data and integrate it—a real chore with traditional market data feeds, requiring additional infrastructure and maintenance.

However, market data delivered over the cloud fits seamlessly with just about any data management system.  A cloud-based market data solution allows firms to instantly enrich their regulatory and investor reporting with comprehensive coverage of real-time, historical, and reference data.

Web APIs from the cloud are easy to implement with just a few simple lines of code, allowing investment management firms to skip the infrastructure and maintenance costs associated with integrating traditional data feeds.  In addition to saving on infrastructure costs, firms save on the costs of the data itself.  Market data from the cloud is paid for based on usage, so firms can optimize their spend and pay only for the data needed to satisfy regulatory demands, and nothing more.

This is the third post in our “Top 5 Investment Management Technology Challenges Addressed by the Cloud” multi-part blog series. Be on the lookout for our next post, “Creating branded, data-rich mobile apps that differentiate.”

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