Investment
Managers
on SWIFT




  THE VALUE OF SWIFT TO INVESTMENT MANAGERS                                              ...
Investment funds:
Interview



            meeting the automation challenge
            While the investment funds industr...
of data analysis. Ultimately it’s a question
Interview


            of controlling the data, agreeing with our           ...
Putting investment managers at
Editorial



            the forefront of the Sibos agenda

            Welcome to the Sibo...
Picking the right partner
Editorial


            working together in order to ensure that
            we continue to brin...
How can SWIFT help you?
Value


                                                                                          ...
Looking Sharp
News



       SWIFT is set to bring relief to fund
       administrators struggling to cope with
       mon...
News


                                                     SHarP transforms a very
                                      ...
SWIFT helps US investment managers address
News



       operational issues of cross-border trading
       How can US buy...
UK corporate pensions community convenes at
News



       SWIFT to drive further efficiency improvements
       STP succes...
The SWIFT Funds Conference
News



       What you had to say
       In June, SWIFT hosted its 5th annual Funds Conference...
Sibos Fund and Investment Management Forum
Meet SWIFT



             Sibos 2008 Vienna, 17 – 18 September

              ...
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Investment funds: meeting the automation challenge

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Investment funds: meeting the automation challenge

  1. 1. Investment Managers on SWIFT THE VALUE OF SWIFT TO INVESTMENT MANAGERS ISSUE 2 Q3 2008 Looking Sharp ▼ The month-end for hedge fund administrators is about to become easier… pg7 Investment UK corporate How can SWIFT pensions community funds: meeting help you? Working together on STP brings concrete results… the automation What’s on offer for investment managers… challenge pg10 pg6 ▼ Adam Lessing, Head of European Business Development, Morley Fund ▼ Management, outlines the challenges for the funds industry in seeking to boost its efficiency… pg2
  2. 2. Investment funds: Interview meeting the automation challenge While the investment funds industry is the bedrock of the securities business, few would dispute that the funds distribution process needs fixing. Yet efforts to tackle inefficiency are now complicated by a harsh economic climate. Financial services firms are spending escalating amounts of time and money trying to attract new customers to their distribution channels rather than in enhancing operational efficiencies. Adam Lessing is Head of European Business Development, Morley Fund Management hat should the funds that the economic and operational climate side, where unusually both equities and fixed W industry be doing? Adam Lessing is Head of European Business Development, Morley presents to funds practitioners, and the role of SWIFT in helping to address them. This is a tough economic environment. income are under pressure. Global funds distribution is still a costly and inefficient business. Does the current Fund Management. Morley is the UK-based How is it impacting the funds industry economic climate make firms more or asset management business of Aviva plc. specifically? less inclined to address operational and Firms within the Morley group of companies There are several challenges. One is a service issues? manage GBP 157 billion (EUR 198 billion) of frustration in actually getting products to Operational efficiency is not a luxury and both institutional and retail funds from offices market. We have at the moment a very the industry as a whole needs to work on around the world. In September, Aviva will be difficult situation in the equity markets service. The task is complicated by the fact formally launching Aviva Investors, combining with significant market corrections. Such that significant amounts of money now flow its asset management businesses, which market corrections have traditionally led, in through platforms. This means that we, the collectively have GBP 316 billion (EUR 623 the first place, to investor uncertainty and fund management companies, are typically billion) of assets under management. then withdrawal. These movements are at one or two removes from our clients, In June this year, Lessing addressed the more severe than normal in the present making it harder for us to interact with them SWIFT Funds Conference in London on the environment. By any historical measure, there and ensure that they are comfortable with state of the market. Investment Managers on are significant outflows. The credit crunch is the propositions we are putting to them. SWIFT spoke to him about the challenges also bringing challenges on the fixed income We have to work with the intermediaries to get our message through to the clients. At the end of the day, there’s nothing magic about this; we have to make sure we have Our industry depends on being able to capture as much the right systems in place and timely access information as possible in a format we can analyse, to the data we need. We have to make sure especially when that information is multi-layered. we adapt to a changing environment. SWIFT’s ability to deliver a faster flow of structured How can technology help? information is increasingly valuable to our industry. Much of our understanding of what Adam Lessing, Head of European Business Development, Morley Fund Management clients in general are doing is a question ▼ Visit swift.com for more information about SWIFT and its portfolio. 2 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT
  3. 3. of data analysis. Ultimately it’s a question Interview of controlling the data, agreeing with our Back-office outsourcing distribution partners on how to interpret it What does it mean for investment managers on SWIFT? and on what to put in place as a result. I n common with several other investment From a business perspective, what do management firms, Morley has outsourced you see as the role of SWIFT in helping its back office. In a bid to focus on their core you address these challenges? competencies, many buy side firms have opted to divest themselves of some of their back-office SWIFT is at the core of the messaging functions in order to capitalise on the expertise industry in financial services. Messages are and scale of specialist providers. Notwithstanding essentially information flow. Our industry some teething problems with early deals, the trend towards outsourcing looks set to continue. depends on being able to capture as much But does SWIFT lose its relevance to Teresa Nolan, Head of Asset Management, information as possible in a format we can investment managers when they outsource? Custody & Fund Administration, EMEA, analyse, especially when that information “Absolutely not,” says Teresa Nolan, Head SWIFT of Asset Management, Custody & Fund is multi-layered. SWIFT’s ability to deliver Administration, EMEA, SWIFT. “Many risks as well as kickstart standardisation of a faster flow of structured information is investment managers that have outsourced critical processes. increasingly valuable to our industry. the processing of their vanilla equities and Post-outsourcing, investment managers fixed income businesses to a service provider continue to perform middle office functions retain their SWIFT capability.” The reason – such as electronic trade confirmation (ETC) Finally, you mentioned in June at the for this, Nolan continues, is that investment – inhouse, and this too can be carried out over SWIFT Funds Conference in London managers still have to perform numerous SWIFT, Nolan points out, and SWIFT also offers activities in which SWIFT can support them in solutions in the areas of collateral management you saw a ‘disconnect’ between what their domestic and global businesses. and securities financing. “We have a range of clients want and what the funds industry One important area in which SWIFT other solutions, including Funds, which are delivers. How serious is that disconnect? is supporting investment managers is in focused on helping investment managers to processing of over-the-counter (OTC) derivatives gather and service assets on a standardised It is more a question of the current – an asset class in which traditional long-only scale,” she says. The extension of SWIFT’s environment than the products our industry managers as well as hedge funds are investing Funds solution into the pension and fund is producing. Fund managers still have a at an ever-growing rate. The processes around of hedge funds areas increases the value of these often complex (and unfamiliar) instruments the SWIFT offering further still as investment problem getting to grips with client needs continue to be fragmented and manual – managers continue to diversify both their client in times of high volatility. Risk appetites meaning high cost and risk for the buy side. bases and investment strategies, she adds. change, for example. But it doesn’t mean SWIFT’s Derivatives solution, enabling “SWIFT continues to be highly relevant electronic communication of OTC derivatives for investment managers even if they have we don’t have the products for that. The notifications between investment managers outsourced some processing to specialist problem is one of communication: we and custodians in Financial Products providers, with our solutions which aim to provide need to do a better job of explaining what Mark-up Language (FpML) over SWIFTNet, both scale and best practices for investment went live in August, and is helping the group managers in their core business of gathering and it is reasonable to expect from a product. of early adopter customers to cut costs and servicing assets,” Nolan concludes. For more information: SWIFT continues to be highly relevant for investment A summary of Adam Lessing’s speech to the SWIFT Funds Conference can managers even if they have outsourced some be viewed on swiftcommunity.net/ processing to specialist providers, with our solutions IMonSWIFT, where his slides can also be downloaded. which aim to provide both scale and best practices for He is also moderating a debate entitled The battle for funds distribution, taking place investment managers in their core business. Teresa Nolan, Head of Asset Management, Custody & at Sibos in Vienna on Wednesday Fund Administration, EMEA, SWIFT 17 September, 09:00-10:00. Visit swift.com for more information about SWIFT and its portfolio. Join the dialogue at swiftcommunity.net/IMonSWIFT Investment Managers on SWIFT 3
  4. 4. Putting investment managers at Editorial the forefront of the Sibos agenda Welcome to the Sibos issue of Investment Managers on SWIFT. Jean Sonneville, Head of Investment Managers Market, SWIFT s I mentioned in the that they often receive or whether they trading venues, collateral management, A inaugural issue of this publication, you are part of a hugely important customer group for have become a convenient scapegoat for the industry. From a broader fund distribution perspective, a panel will examine the investment management operations and SWIFT connectivity via Alliance Lite. We firmly believe that Sibos is increasingly becoming the leading conference for SWIFT, and our recognition of this is clearly future products that are likely to be thought leadership in the securities industry, demonstrated by the Fund and Investment successful and the channels through and the broad range of industry speakers Management Forum that we are running which they will be most effectively sold. taking part backs this up With the chairman specifically for you and your service providers We will complement this with an additional of EFAMA, SIFMA, the Association of Mutual at Sibos in Vienna, on 17-18 September. session looking at how regulation may Funds in India, and the Managed Funds Our industry continues to be challenged also impact the growth of the investment Association from North America taking by tough economic times, by significant funds industry and how important it will part, we will ensure that industry views are outflows from mutual funds, and by itself – as be to reach a balance between investor well represented. Leading firms such as it looks to introduce effective regulation which protection and client choice. Schroders, Thames River and ICAP are promotes investment, while also protecting Diversity and choice are, in fact, key represented by their COOs, while it is the the interests of corporations. We recognise themes for the forum agenda and so CEOs of Ausmaq, Pension Governance and this fact, and have ensured that our two-day alongside these panels, and the broader Standard Chartered who will be taking the programme for you in Vienna tackles all of topics of the Sibos programme, will be stage on their behalf. All of this will ensure these key topics. The concise structure of a comprehensive selection of sessions critical dialogue of the highest calibre. the forum, within the full Sibos week agenda, covering OTC derivatives, foreign We look forward to seeing you in Vienna, provides a focal point for critical dialogue, for exchange, pensions, carbon trading, to sharing your views on the challenges information-sharing and for discussing the ethical investment, securities lending, that lie ahead for our industry, and to future of your business with clients, peers, partners and service providers. During the course of the two days we will investigate the challenges that investment The concise structure of the forum in Vienna, within firms face as they attempt to combine the diverse cultures and styles of traditional the full Sibos week agenda, provides a focal point long-only management with hedge fund for critical dialogue, for information-sharing and for strategies. Taking this a level further, a discussing the future of your business with clients, formal panel debate will evaluate whether peers, partners and service providers. hedge funds really deserve the bad press Jean Sonneville, Head of Investment Managers Market, SWIFT Visit swift.com for more information about SWIFT and its portfolio. 4 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT
  5. 5. Picking the right partner Editorial working together in order to ensure that we continue to bring you the operational efficiency and security that you have come SWIFT’s Partner Management team helps to expect from SWIFT. investment managers find third party solutions Meanwhile, we hope you find this second to support their SWIFT business. issue of Investment Managers on SWIFT informative and valuable. As Morley’s Adam s an investment applications, SWIFTReady services A Lessing, interviewed in our cover story, manager joining or a connectivity offer (interface or points out, SWIFT has a major role to play SWIFT, how can service bureau). in helping the funds industry deal with the you be sure that any n SWIFT Regional and Global Partners many challenges it faces today. The news third-party solutions have built a joint customer value in this issue about our work on automation you buy are compliant with SWIFT? proposition and a close commercial for fund of hedge fund transactions, the How do you choose a provider to help and marketing relationship. pensions industry and the Fund Processing you with any SWIFT-related integration To illustrate how you can benefit from Passport, among other initiatives, and be certain they have the right our revamped partner programme, demonstrates how seriously we are taking expertise to perform the job? let’s take the example of SWIFTReady that role in helping the industry improve Our SWIFTReady certification solution providers. Within securities, efficiencies and reduce costs and risks. Our programmes validate the solution there are four categories of customers in this investment management providers and capabilities available to SWIFTReady application labels: industry feature throughout the pages that SWIFT customers. Corporate Actions, Funds, Securities follow, and we hope you find their insights SWIFT has established a working Settlement and Reconciliation. For and experiences useful as you tackle these relationship with various regional and each, there is a clear set of criteria that challenges in your own firms. global companies including application the SWIFTReady application supports. As ever, we’re keen to hear your vendors, interface providers, integration These criteria are SWIFT-specific and views. You can join the dialogue in experts, connectivity providers and re-evaluated on a yearly basis. They the Investment Managers on SWIFT local agents for sales. The community are designed to reflect the capability of community at swiftcommunity.net/ of SWIFT partners is there to offer a product to provide automation in a IMonSWIFT or, if you prefer, email us complete customer solutions for the SWIFT environment. The label granted directly at: IMonSWIFT@swift.com market segments in which investment to an application clearly indicates managers operate around the world. the market and the year for which Jean Sonneville, Head of Investment the criteria were fulfilled. These four Managers Market, SWIFT Partners SWIFTReady labels have been granted All companies registered with SWIFT to 20 applications. Partner Management are classified into Visit swift.com to get the latest one of three categories: information about existing labels as n SWIFT registered vendors. This is well as the providers who successfully the entry level into SWIFT partner completed their certification in 2008. programmes. All these partners We’re planning to improve our partner get access to the right SWIFT programme in the future to meet information, testing tools and the specific needs of the investment development products from SWIFT. management community. And we n SWIFTReady solution providers would like to hear from you. Please let have one or several SWIFT certified us have your suggestions by email to: solution components: SWIFTReady partner.solutions.generic@swift.com. Visit swift.com for more information about SWIFT and its portfolio. Join the dialogue at swiftcommunity.net/IMonSWIFT Investment Managers on SWIFT 5
  6. 6. How can SWIFT help you? Value SWIFT portfolio updates Solutions SWIFT’s value proposition for investment managers. More than 200 firms are now registered to use the Funds solution, over half of which are either live or in test and training mode. Our Derivatives solution – enabling automated notifications for OTC derivatives trades between investment managers and custodian banks via SWIFTNet in FpML format nvestment Corporate Actions I – went live in August 2008. managers are facing Enables and improves event Accord, our established foreign exchange ever-increasing communications between public confirmation matching solution, is being extended to cover equities and fixed income. pressure to improve companies and their stakeholders. This will support our recently announced performance, reduce pre-settlement matching service for use by costs and reduce operational risk. As Derivatives prime brokers and executing brokers to match securities trades originating from hedge funds global markets fluctuate, so too does Enables automation for OTC derivatives globally. the volume of trading. Investment transactions. managers cannot, however, maintain Messaging The Simulation Testing and Qualification Service the additional resources required for Funds (STaQS) for Corporate Actions is now available. processing high trade volumes during Covers account management, It allows you to test your Corporate Actions periods of relatively low activity. SWIFT order flows, transfers and reporting Notification and Confirmation messages (MT 564 and 566) for market practice compliance. provides simple solutions to these messages on prices and cash issues. Automation is the key to cost forecasts, statements of holdings Connectivity reduction. and statements of fund transactions. Alliance Lite is designed for firms exchanging fewer than 200 messages per day and is being Major community initiatives are formally launched at Sibos 2008. The Internet- What we offer under way in hedge funds, pension based connectivity option provides a direct, n Standardised messaging across the funds and the Australian market. secure and low cost access to SWIFT. You do not have to install SWIFT-specific connectivity trade and asset servicing lifecycle products at your premises. Instead, you can n Lower costs through STP and Transaction Reporting access Alliance Lite using a standard Internet channel rationalisation Following the completion of the connection. At the other end of the connectivity n Reduced operational risk through development of ISO 20022 transaction spectrum, the latest release of Alliance Access increased control, security, and reporting messages, further work can handle 1 million messages per day. The reliability is under way to raise regulator main benefits of this new interface for firms with high volumes are: scalability, availability n Improved ability to comply with and market awareness of the new and better integration with your back office. industry initiatives and regulations standards and of SWIFT as a secure Alliance Access is available now. such as Giovannini and MiFID. delivery channel. Services Our Training team are currently running two SWIFT’s solutions for Proxy Voting courses tailored to the needs of investment investment managers This solution covers the entire proxy managers: Understanding Funds messages and flows and SWIFT messages for Accord voting lifecycle, delivering STP-ability investment funds distribution. Enables real-time matching and between the issuers and the beneficial exception handling for foreign owner, and through all intermediaries For details, please visit www.swift.com exchange, money market and such as custodians, exchanges, and derivative confirmations. proxy agencies. Visit swift.com for more information about SWIFT and its portfolio. 6 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT
  7. 7. Looking Sharp News SWIFT is set to bring relief to fund administrators struggling to cope with month-end paper records. Drew Douglas, Head of Alternative Fund Services, HSBC AFS hile hedge funds are post-trade procedures being adopted by brought several major custodians and W seen as pioneering in traditional mutual funds.” The end result fund administrators together with SWIFT terms of investment – “mountains of paper”. to develop the messages, building on strategy, their After two years of development with work already completed in ISO 20022 administration and a dedicated working group, SWIFT has for the broader investment funds processing procedures are far less now unveiled a set of messages that go industry. The initiative focuses on the cutting-edge. Writing in the FT in mid- a long way to addressing the specific flow of information between custodians, July, Peter Norman, author of Plumbers processing needs of hedge funds, funds administrators and transfer agents and Visionaries: Securities Settlement of hedge funds and limited partnerships. relating to subscriptions, redemptions and Europe’s Financial Market, pointed SHarP (SWIFT hedge fund harmonisation and reconciliations of account holdings. out: “As with much of the fund industry, project) leverages the ISO 20022 The messages are presently being the unglamorous financial ‘plumbing’ standard and has also agreed with the piloted and will be available for general that ensures the successful completion Depository Trust & Clearing Corporation use, either live or for testing purposes, in of hedge fund transactions relies heavily (DTCC) that the latter can use the November. Market practice discussions on manual processing, based on faxes, new messages in its own Alternative over the summer in Ireland, Luxembourg phone calls and spreadsheets, which Investment Product (AIP) services. Says and Switzerland have helped adds greatly to cost and risk.” However, Norman: “The combination of Sharp and administrators adapt the messages Norman noted: “Hedge funds have their AIP could become a global standard, to local conditions. own complexities in terms of structure, according to fund administrators.” client base and documentation that Based in Dublin, one of the global What is involved? have prevented the use of standardised offshore funds centres, SHarP has A fund of hedge funds is as it sounds: an investment company that invests in hedge funds rather than in individual securities. Unlike an open-ended The reason why, collectively, the people around the mutual fund, there is no investor right table believe that this will actually be achievable is that of redemption. The reason the industry, they haven’t bitten off more than they can chew. and regulators, are concerned about processing inefficiencies is that, if ▼ Drew Douglas, Head of Alternative Fund Services, HSBC AFS Visit swift.com for more information about SWIFT and its portfolio. Join the dialogue at swiftcommunity.net/IMonSWIFT Investment Managers on SWIFT 7
  8. 8. News SHarP transforms a very SWIFT proposes manual process into a solution for FPPs very automated straight- A SWIFT-provided single window will through process. enable the funds industry to exploit the Don McClean, Executive Director, UBS full automation potential of the Fund Processing Passport T he Fund Processing Passport (FPP), created this year by the European Fund & Asset Management Association (EFAMA), is designed to meet the need for standardised operational information about funds to facilitate trading on a global basis. The FPP is a short, fully harmonised document, containing all the information required to initiate a transaction registered with the regulatory authority, particularities, often running to several in a fund. In the context of the increase in such funds can be offered to an unlimited pages. Nevertheless, the initiative is cross-border funds distribution – UCITS funds, for example, are sold in more than number of investors and have lower expected to evolve. “I think the reason 150 countries worldwide, with the highest minimum entry thresholds. Volumes are why, collectively, the people around the growth rates occurring in Asia – the FPP is expected to grow rapidly. table believe that this will actually be positioned to provide all the necessary data in a standardised format. As volumes increase, the resulting achievable is that they haven’t bitten off Fund promoters are now in the process of documentation places an increasing more than they can chew,” says Drew creating FPPs for their funds, and a set of best strain on administrators’ back offices, Douglas, Head of Alternative Fund practices proposed by EFAMA and SWIFT is being validated by the funds industry. while custodian banks need to Services, HSBC AFS. But while making operational information consolidate and reconcile month-end By involving the largest players in the available in a standardised format is a very statements from administrators and custody and administration arena, which important step forward, to capitalise on the opportunity for automation created by the FPP, transfer agents with their own records. tend to handle both single manager funds the information also needs to be exchanged These are more often than not faxed as well as funds of hedge funds, the efficiently between fund promoters and fund over at the end of the month. Some impact on volumes should be significant. distributors. As Bernard Hanratty, Head of Funds EMEA at paperwork is also required by regulators More than 20 major players are now Citi, said during the SWIFT Funds Conference for oversight purposes. signed up to the project. in London in June, there is much activity in As Don McClean, Executive Director, The initiative is under the control of terms of service providers talking to their customers about FPPs, but what is needed UBS, points out, the current manual David Hardman, Head of Relationship is a “pan-European” solution otherwise each environment creates a spike at every Management for Custodian Banks in country will move according to its own agenda. month-end for those involved in the UK and Ireland at SWIFT, who, SWIFT wants to support the funds industry by examining how this data can be efficiently processing funds of funds. “We see as a former custodian, is familiar with communicated and shared between the that the last three days of the month the frustrations that the back office different stakeholders involved. This solution are pretty much pandemonium for experiences. “It has been extremely would enable funds industry participants to exploit the full automation potential of FPPs. the custodians of funds of funds,” he encouraging to see the industry “Once all the available FPP data can be told delegates at the SWIFT Funds collaborate, build and hopefully in early provided in one format via one single point of Conference in June. “SHarP takes away 2009 deliver together a market solution entry, fund distributors can actually integrate this information in their processes and further that spike and transforms a very manual that will reduce operational risk and improve automation,” says Jean Sonneville, process into a very automated straight- improve efficiencies,” says Hardman. head of investment managers at SWIFT. “This through process.” “The industry is setting the foundations will allow them to move away from faxes and other non-STP channels, decreasing operational Initial subscriptions will not be covered for years to come by being focused on risk and pushing down processing costs.” by SHarP as they contain numerous legal true deliverables.” Visit swift.com for more information about SWIFT and its portfolio. 8 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT
  9. 9. SWIFT helps US investment managers address News operational issues of cross-border trading How can US buy and sell sides tackle problems with settlement fails on non-US dollar trades? n 2 July 2008, SWIFT’s Most of the attendees can be applied in the buy side to sell side O New York office hosted its business to help address the operational were in agreement that first Investment Manager challenges of non-US dollar trading. The and Broker/Dealer it will take more time, group was able to leverage the experience roundtable event, bringing discussion and consensus of Jim Lewis, Vice President at Bank of together 22 representatives from 14 US to find solutions to all of America Securities, and a co-chair of the buy side and sell side firms for a discussion the challenges discussed. SIFMA cross-border sub-committee. He entitled ‘Analysing the pain of non-US$ provided critical operational background trading’. The focus of the roundtable was on this topic from the perspective of his the operational challenges experienced and the impact of the manual efforts sub-committee’s work in the broker-to- by US investment managers and broker/ required to correct these problems. broker arena. Lewis also offered to liaise dealers when undertaking trading in non-US The discussion also explored a number between the different groups active in this dollars – as well as exploring ways to of possible solutions to these problems. area to help foster communication and alleviate the risk of settlement failure. Standardisation of processes, messaging help the industry to reach consensus on The roundtable participants were all in and regulation were common themes. As eventual solutions. agreement that for US firms, non-US dollar one example, SWIFT’s MT 515 message Commenting on the value of the trades pose settlement challenges in a – confirmation of a purchase or sale of a roundtable, Jan E Snitzer, Vice President, number of areas, including: asset inventory security – was described and offered as Loomis Sayles & Company, said: “I found it location agreement; discrepancies with a possible means to identify differences in interesting, informative and very refreshing place of settlement (PSET); differing trade details early enough in the trading to be part of a conversation with investment settlement expiry practices by market; process to prompt corrective action and managers and broker/dealers discussing in settlement instruction errors; faxed avoid settlement failure, especially in a pre- detail challenges that we face every day.” notifications; and linking free-of-payment settlement matching scenario. The Investment Manager and Broker/ deliveries with related FX transactions. Most of the attendees were in agreement Dealer roundtable event will re-convene When issues such as these occur, that it will take more time, discussion and later in 2008. the participants agreed, they require consensus to find solutions to all of the manual corrective efforts that too challenges discussed. For information on how to participate, frequently are not carried out in time please contact: to avoid settlement failures. During the Leveraging the broker experience Bea Inigo open dialogue around the table, each The roundtable also offered an interesting beatriz.inigo@swift.com participant shared their insights into the opportunity to establish whether lessons Dennis Goodenough issues that can lead to settlement failure, learned in the broker-to-broker space dennis.goodenough@swift.com Visit swift.com for more information about SWIFT and its portfolio. Join the dialogue at swiftcommunity.net/IMonSWIFT Investment Managers on SWIFT 9
  10. 10. UK corporate pensions community convenes at News SWIFT to drive further efficiency improvements STP success hailed as just the beginning of what industry collaboration can achieve. ixty per cent of the UK S defined contribution (DC) corporate pensions community is now live on SWIFT’s Funds [The IMSDG] is being solution for automated order processing heralded as a model of and pricing. Following the success of how industry collaboration this initiative to introduce straight-through can work. processing (STP), the corporate pensions Ian Richards, Legal & General Investment community is focused on extending the Management benefits of industry collaboration further still. On 2 June, more than 80 of the UK’s largest pensions players, including banks, fund companies and administrators, attended a meeting at SWIFT in London to as well as some developments which forefront of delivering dynamic pension discuss the continued use of ISO 20022 could help both new and existing members solutions to transform the experience of messages over SWIFTNet to further reduce of the pensions community maximise the end investor,” he said. “ISO 20022 and risk and enable more cost efficiencies and their profitability and business processing SWIFTNet help us to provide this in a cost- customer service improvements for the power. Edward Glyn, Director, Funds at efficient, scalable and risk-free environment. corporate pensions industry. SWIFT, said: “Our focus going forward is to We have an industry agreed market practice This was the first 2008 meeting of continue to drive industry take-up within the for corporate pensions order processing the Investment Management Straight pensions space and explore with our clients and now that SWIFT is lowering the barriers Through Processing Development Group both new transaction flows and markets for to entry, there is a great opportunity for (IMSDG). The IMSDG provides a forum in improved efficiency.” even the smallest members of the pensions which its members can work together to A number of industry representatives community to collaborate and benefit from increase efficiency and improve services made presentations on a range of key automated fund processing.” by exchanging information and developing topics, including streamlining cash The spirit throughout the event was common standards. processing and settlement; improving one of collaboration, highlighting the Ian Richards, Chairman of the transfers on an individual and bulk-member importance of communal efforts to drive IMSDG and Head of DC Strategy and level; incorporating fund performance the industry in the same direction through Governance, said of the STP initiative data into market practice; and leveraging the adoption of harmonised business and already under way: “We are starting to opportunities for efficiencies and growth in market practices. make a major breakthrough here for the cross-border marketplace. Ian Lyall, Managing Director at Idea the pensions industry that is going to Andy Hussey, Senior Business Systems Group, said: “It is important for us to broaden out way beyond STP. This is Analyst at Watson Wyatt and Co-Chairman continue to work as a community, and being heralded as a model of how industry of the National Market Practice Group anyone who does something different collaboration can work.” (NMPG), shared his views on how the will effectively jeopardise the potential for A presentation from SWIFT highlighted the pensions marketplace is progressing in its harmonious working and take away some value of STP in community-based solutions, adoption of STP. “Watson Wyatt is at the of the value of STP.” Visit swift.com for more information about SWIFT and its portfolio. 10 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT
  11. 11. The SWIFT Funds Conference News What you had to say In June, SWIFT hosted its 5th annual Funds Conference in London. Over 260 delegates took part in a day packed with constructive debate. The dialogue continues online at swiftcommunity.net/IMonSWIFT. We look forward to seeing you there. In the meantime here are some highlights. Ian Richards Don McClean Philippe Seyll Jonathan Butterfield Richard Parkin Legal & General UBS ClearstreamBank CLS Fidelity Ian Richards: Don McClean: team in the industry and work STP becoming effective. For us it was At UBS we have towards a standard network Sending you my Excel essential that the developed a that can be accessed by all spreadsheet is a substitute for [pensions] STP initiative came SWIFT-enabled system participants. doing what is actually much in. The business was just not whereby clients who are able smarter for the future. scalable without doing that. to send messages via SWIFT Philippe Seyll: We have learnt a lot of can use the same network to ISO 15022 and Richard Parkin: lessons about how the send trades to us. However, ISO 20022 should The big game for me industry can work together in manual intervention is still be undisputed by the market. as platform provider introducing something, using required to fully execute There is no reason to re-invent is to drive through the the ISO 20022 messages. trades. Industry participants the wheel outside of those penetration of the [pensions] And why can’t we do the are working internally to formats. STP initiative in the market. We same in other areas of the generate automation, but have got some big fund business? We’re just starting these efforts are not currently Jonathan managers in the market discussion groups and we are co-ordinated through the Butterfield: already and we’ve got some just where we were when we industry. Not until we do At present, the big administrators in the started the STP initiative on something as an industry is it plumbing process is a huge market already, but to get things like performance really going to change the drag to innovation. So I would successes we need to do the reporting. We can use ISO landscape for fund of hedge like to say, two years, go green, mopping up of the rest, 20022 across the board; funds trading. We have to take kill paper. Excel is the greatest persuading people that leverage it, and we have a the commonality that is being product invented by Microsoft, perhaps the channelling wonderful opportunity. developed by a collaborative but it’s the greatest barrier to business is worth going for. Visit swift.com for more information about SWIFT and its portfolio. Join the dialogue at swiftcommunity.net/IMonSWIFT Investment Managers on SWIFT 11
  12. 12. Sibos Fund and Investment Management Forum Meet SWIFT Sibos 2008 Vienna, 17 – 18 September he Fund and Hedge funds versus Investment T Investment Managers: When two worlds Programme Management collide? Wednesday 17 Thursday 18 Forum, now As the industry consolidates and September 2008 September 2008 in its fourth traditional investment firms seek to 09:00 The battle for funds 09:00 Migrating to the future year, will once again provide an get on the hedge fund bandwagon, distribution of funds OR OR unparalleled mix of dedicated it’s no longer unusual to find hedge Securities lending activities SWIFT’s value proposition conference sessions and funds and mutual funds being run by are undermining shareholder for investment managers networking opportunities for the same firm. But managing a hedge voting rights and affecting 10:00 Networking time the outcome of Corporate investment managers and their fund is very different to managing 11:00 Big issue debate: Events: Myth or fact? counterparties. a mutual fund: different cultures, What keeps your CEO OR awake at night? Trading venues - opportunity The senior level speaker line-up different levels of complexity in traded 12:00 Lunch and networking or cost? includes: instruments, different core systems time 10:00 Networking time n Markus Ruetimann, COO, in front and back offices, different 14:00 Will regulation help or 11:00 Hedge funds are the hinder the investment funds root of all evil Schroders investment strategies – and different industry? OR n Jeremy Charles, COO, operational requirements. How do OR The Funds Processing Thames River you overcome the culture-clash? Alliance Lite for investment Passport n Adam Lessing, Head of European How do you integrate two separate managers OR OR OTC, RIP? Business Development, Morley operational systems? Conquering the standards 14:00 Lunch and networking n Julian Shaw, Head of Risk co-existence challenge time Management & Quantitative Where is my pension? 14:00 Where is my pension? 15:00 Networking time OR Research, Permal The issue of pension shortfalls 16:00 Hedge funds versus Collateral damage investment managers: when n Robert Brown, CEO, AUSMAQ is a universal one, caused by a management – past, present two worlds collide n Mathias Bauer, Chairman, EFAMA combination of longer life expectancy or future OR OR n Jack Bouroudjian, Chairman, and inadequate planning. How does Carbon trading: warming up The Asian Century: how will Capital Markets Technology the financial services industry need to a global community? it change the global financial OR services industry? to respond? In most markets, you How to break the FX 15:30 Sibos Closing plenary Highlights of the Fund and need returns way above forecast bottleneck 16:30 Networking time Investment Management Forum beta. Does that mean that leveraged 17:00 Networking time 19:30 Sibos party include interactive panel sessions on: investment will become the norm? Other upcoming events 29 October, 2008, London: 11 November, 2008, London: 1-3 December, 2008, Bahrain: Corporate actions automation Practical solutions for pensions automation Fund Forum Middle East 2008 Launch of CityIQ/SWIFT Research A joint event from SWIFT, Watson Wyatt and Gulf Hotel BBH, SWIFT office Visit swift.com for more information about SWIFT and its portfolio. 12 Investment Managers on SWIFT Join the dialogue at swiftcommunity.net/IMonSWIFT

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