CACEIS NEWS 36

produCts and services

No. 36 - January 2014 - caceis news 5

CACEIS launches execution services CACEIS is providing its buy-side clients with direct connectivity to electronic markets for their equity and listed derivatives trading. CACEIS offers easier access to liquidity, a best-execution guarantee and broker neutrality.

trading or post-trade matters. The team has trad- ing experience with all types of clients - both buy and sell side - and expertise in a range of areas (including markets and IT), with a sharp focus on commercial relationships. As a result, clients get an immediate solution to their problems, which is crucial in this business. The experts can also sup- port clients with customised additional services, such as accounting relating to CSAs (Commission Sharing Agreements) and TCAs (Transaction Cost Analysis).” CACEIS provides connectivity (via the FIX pro- tocol) to electronic markets, crossing networks, and algorithmic models. With this available open configuration, end-clients remain free to select any financial information providers and brokers - either single or multiple - they wish. CACEIS can provide a turn-key white-labelled solution. Its integrated execution offering for equities and listed derivatives includes all liquid- ity pools, i.e. traditional markets, MTFs and dark pools. Best-execution and best-selection reportings round out the service, which is ide- ally suited to dealing with the increasing frag- mentation of market infrastructures and with regulatory constrains. CACEIS enables asset managers to modernise their workflows, achieve full STP, improve ac- cess to liquidity, minimise trading costs and reduce operational risks. Its resources enable buy-side clients to optimise their investment strategies and gain increased control over execu- tion as part of a MiFID-compliant framework ■ A single connection covering all markets

Clients benefit from: ▷ Large-scale technical and human resources, ideally suited to handling major managerial and regulatory changes (MiFID II, AIFMD, UCITS IV), including a full audit trail and the ability to set up pre-trade compliance controls (risk constraints, management and regulatory ratios), along with best-execution and best-selection reporting; ▷ Applications maintenance and IT back-up services, along with a Business Continuity Plan; ▷ Greater responsiveness in terms of trading new instruments, since CACEIS’s information systems can be easily adapted to handle growth in their business; ▷ A high level of STP due to a fully integrated and automated processing value chain, which increases security and reliability and reduces operational risk.

T he main distinguishing features of CACEIS’s execution services are the fo- cus on client relationships applied by its dedicated specialists and the integration of direct connectivity to electronic markets in its global comprehensive post-trade offer covering settlement, custody, fund administration and depositary bank services. Philippe Leprince , Head of Execution Services, has over 20 years of experience in execution services. He emphasises that “people think that electronic trading leaves no room for human in- teraction, but actually it’s a service business where personalised support is vital. Given constant changes in technology and regulations, clients expect providers to guide them and understand their needs. I firmly believe that service is one of the most important aspects. At CACEIS, clients can speak to their dedicated contact person on the execution desk on issues relating to technology, philippe leprince, Head of Execution Services, CACEIS

CACEIS’s AIFMd regulatory reporting EFFICIENTLY ACHIEVING compliance Gilles de Foucault, Product Manager, CACEIS

What about the new AIFM regulatory

within the EU. Following the first reporting package, AIFMs will have to meet their obligations in accordance with article 24 of the AIFM directive. The reporting frequency will then be quarterly, half-yearly or annually depending on the assets under management and whether leverage is used or not. What are the components of the AIFM regulatory reporting? The AIFM reporting is common to all AIFMs and AIFs, and includes three major categories of information: general AIFM-level data, such as the main instruments and market traded or main positions taken, detailed information on the composition of funds and, where the AIF makes significant use of leverage, specific information on the use of such leverage. In concrete terms, some data needs to be consolidated at the level of the AIFM, other needs to be coded and formatted as requested by the regulator and, finally, some needs to be calculated. “Level 2” regulation has made it possible to clarify a number of issues, particularly the calculation of assets under management and the effect of leverage. Technical details have been clarified by ESMA in 2013. How does CACEIS support its AIFM clients in producing their regulatory reports? CACEIS offers an AIFM reporting product to help its clients complying with their new obligations. This is intended both for managers wishing to retain management of the process of producing their AIFM reporting package and for AIFMs managing a limited range of AIFs who wish to outsource all of their AIFM reporting. In practice, a significant part of the AIFM reporting may be fed from accounting data and the AIFM’s registrar. Among these are reference data for the management company and its funds, inventory valuations, history of portfolio changes, and subscriptions and redemptions over the reference period. CACEIS will also be able to provide a number of simple and complex calculations to define the AIFM’s contribution to AIF risk management reporting. Note also that where the AIFM already outsources risk management in whole or in part to Luxcellence, CACEIS’s UCITS IV compliant plug-and-play solution for investment companies, CACEIS is able to populate the AIF’s market and liquidity risk infirmation in the AIFM reporting package ■

reporting and what

are its main objectives? The AIFM directive imposes on

AIF managers, whether AIFMs authorised or not, which manage or distribute AIFs in the European Union, a new

obligation of periodic reporting to regulators with regard to their investments, leverage and exposure. This reporting package will have to be delivered in January 2014 at the earliest. One of the main AIFM regulatory reporting objectives is to make it possible for European regulators to monitor systemic risks. ESMA will then be able to make recommendations on systemic risk prevention to the competent national authorities which will, in turn, be able to impose limitation to the leverage an AIFM. How are the nature and frequency of AIFM reporting to competent national authorities determined? The nature and frequency of reporting obligations depend mainly on the assets of the AIFs managed by the AIFM, and whether leverage is used or not. Delivery of the first reporting is subject to specific arrangements. ESMA recommends that the first report period should start on the first day of the quarter following the AIFM’s authorisation and end on the last day of the reporting period. However, this recommendation refers to national regulators’ decisions in respect of definition of the first reporting date, opening the way to different situations