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April 2009

Volume 6 No. 38
GBP 25 - UK, ROW
USD 45 - America
EUR 35 - EMEA
www.ISJ.tv

Analyse this - SEPA today


Profile - Jon Robson, Thomson Reuters
Panel - Benelux Fund Administration
THE GLOBAL SECURITIES SERVICES INDUSTRY MAGAZINE

New role for


the Old Lady
Could a privatised Bank of England
mean better regulation?

Outsourcing - Who, where, why, how?


Russia - An investor challenge
Sec lending reinvestment - Money market funds
Hedge Fund Technology - Compliance & complexity

Front Cover Section ISJ38.indd 1 6/4/09 18:00:22


ISLA & RMA Present

18th
Annual 2009
Conference on 23 26 june

international securities lending


Hotel Arts • Barcelona, Spain

The joint U.S./European Securities Lending Conference sponsored by the two


recognized industry associations.
Issues that influence lending markets in Keynote Address:
Europe and around the world: Risk Management Lessons from the Financial
• Change in Regulatory Requirements Affecting Crisis
Securities Lending. Juan Andres Yanes, Chief Risk Officer,
• Beneficial Owners: Are You Lending Securities Grupo Santander, Madrid
Now?
• Industry Leaders: Surviving the Crisis and This is the conference that identifies best
What’s Next for the Market? market practices and sets global standards in
• Central Counterparty and Recommendations international securities lending.
of ISLA Working Group.

Come and join your colleagues for these important


updates and discussions!

For more information and to register visit RMA’s Web site:


www.rmahq.org/RMA/SecuritiesLending/
or contact Kim Gordon (215) 446-4021,
E-mail: kgordon@rmahq.org

Conference Chair: David Hopton, Managing Director, Santander


Global Banking & Markets, London
ISJ Investor Services Journal Heads up

Industry consolidation in both the asset management and hedge fund


space is another driver of technology spend. Mergers will create larger
firms that have greater amounts of capital to spend on technology.
Over the last 5 years, the number of acquisitions has generally trended
upwards. Following a dip in 2007, there was a large spike in M&A activ-
ity in 2008. Hedge fund consolidation is being facilitated by
acquisitions of alternative investment firms by larger financial institu-
tions including universal banks and large asset managers. M&A
activity also creates demand for IT because acquirers need to assimi-
late acquisitions technologically. Consolidation increases the need for
an integrated approach to technology with common products, systems,
P.22 SEPA P.17 Fund Administration P.15 Russia Marketand Profistandards
le P.17business
across Fund Administration P.15consolidation
units. However, market Russia Market Profile
may also prompt reviews of spending to streamline operations and
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 costs, diminishing technology demand.

Figure 5: Asian Investment Management Industry Consolidation


Asian investment management consolidation
P.06 News

Number of outright acquisitions


Asian Investment Management Industry
Our monthly Consolidation
30
30
Last year saw a steep
selection of the key

Number of outright acquisitions


stories, reports and 25
25 incline in the amount
annoncements from 20 of consolidation in the
ISJ.tv 15 asset management
15
space as many more
10
10
of the strong survived
Editor:
Ben Roberts 55 and the weak were
Ben@2ipartners.com poached.
Editor’s letter 00 SOURCE: Bloomberg
Contributors: 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008
Brian Bollen,
Anthony harrington Cautious hope Source: Bloomberg
back office functions is a profit; some no longer
Account managers:
tarik Rekiouak We are one quarter down an example. Providers of exist. Many pension funds
As the Asian investment management industry grows and more new
Tarik@2ipartners.com
Mark needham
in what should be called the outsourcing services are have held firm with their
players enter the market, firms are looking for ways to remain compet-
itive. Firms are turning to advanced technologies to give themselves an
mark.needham@2ipartners.com year of reconstruction. The offering an increasingly hedge fund allocation amid
edge. They are adopting technologies that support more complicated
Senior account manager: meeting of the G20 leaders diverse set of services for – in revisions of liquidity in
trades and sophisticated trading strategies. They are also looking to
Patricia De La Grange reduce costs as well as maintain client confidentiality and keep their
Trish@2ipartners.com
in London was well-timed particular – asset managers, some of the world’s biggest
activities private by circumventing brokers.
as we enter the second taking on much of the retirement plans.
Business development manager:
James olweny quarter, though despite a administrative
There and rise
has been a significant post- Much and
in multi-asset, cross-asset, external
cross- scrutiny
James@2ipartners.com border trading, which is driving adoption of technologies that support
knee-jerk stock market lift trade burden to allow them will remain
these complicated trades. Cross-asset trading (when an equity security
on the operations
website developer: Peter Ainsworth
peter@2ipartners.com
(including a week-long rise to focus
is bought and on stockis written
an option market of hedge
at the same time, funds
e.g., foreign secu-and the wider
in US stocks that rivalled twists
rity bought,and newis sources
FX hedge made) and cross-border ‘shadow banking’
trading (trading across system.
Systems developer: Kushtrim ukaj exchanges of different countries) have been expanding across Asian
Kushtrim@2ipartners.com 2007) and a USD1,000 of value. In this issue ISJ focuses on
Data administrator: Annika Elvrum
billion contribution to the Cost savings, a decline their internal processes,
annika@2ipartners.com International Monetary in personel and tapping and analyses the technology
operations manager: Sue whittle Fund, the longer-term 10
provider’s expertise are top offerings that facilitate
Copyright 2009 © Oliver Wyman
Sue@2ipartners.com
effects of their uneasy unity reasons for this activity. On trading, administration and
Commercial director:
Jon hewson
on sentiment and an open, page 10, ISJ investigates the client reporting.
Jon@2ipartners.com global trading floor against outsourcing trend, including Regulation - or rather,
CEo: Mark Latham protectionist tendencies is companies that offer what it will become - is
Mark@2ipartners.com
undefined. solutions to these providers. another area undefined
2i Media plc Some areas of the market Hedge funds may look following the meeting of
uK
16-17 Little Portland Street, seem to be sensing a turning upon the second quarter with the world leaders. In the
London W1W 8BP, UK
T: +44 (0) 20 7299 7700 point. Shareholders in HSBC muted optimism. A partial UK there are growing calls
F: +44 (0) 20 7636 6044 snapped up 97% of the bank defence of their sector from for change to the regulatory
uSA in a rights issue, a significant Lord Turner of the Financial structure. The unpopularity
410 Park Avenue, 15th Floor
New York, NY 10022 statement of intent and a Services Authority was with the FSA has led to
T: +1 212 231 8421
F: +1 212 231 8121
reemergence of the long welcomed by AIMA and kept suggestions as to the role
position in a bank. the emphasis on banks and of the Bank of England as
© 2009 2i Media plc
All rights reserved. No part of this In the midst of AIG. Reports have shown its replacement as the City
publication may be reproduced, in whole
or in part, without prior written
uncertainty and change, new money flowing again into watchdog, an issue discussed
permission from the publishers. combinations of securities hedge funds after a greatly on page 7. n
ISSn 1744-151X.
services continue to develop. varied last year for the
Printed in the UK Outsourcing middle and sector: some funds recorded Ben Roberts, Editor

1-16 ISJ38 APR5.indd 1 5/4/09 22:54:03


Contents ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Contents
Richard Davies,Analyse This
page 22
In this issue Custody

COVER STORY 04 Letters to the editor 15 Climate not changed


Russia - Is the invetsor
06 News and mandates services market for foreign
The last month of updates in institutions still a Churchillian
custody, clearing and settlement, “riddle, wrapped in a mystery,
securities lending, legal and inside an enigma”.
compliance and technology.
17
ISJ Panel Debate
07 Regulation - Benelux fund
Cover - Banking on administration ISJ asks
industry experts about the
revolution
servicing of funds in the region. Climate not changed Russia,
Our new series on New Model
Banking begins by looking at page 15
calls for a privatisation and a Securities Lending
re-empowerment of the Bank of
England.
20
Reinvesting the wheel -
08 People
Cash collateral
Profile - Jon Robson, The use of cash collateral has
Thomson Reuters been an ongoing concern in
The head of Enterprise Strategic securities lending - with money
Business Unit of the firm’s market funds a viable option,
Markets Division talks to Ben finds Brian Bollen.
Roberts.
New role for the Old Lady
Regulation, page 7 Payments
10 Fund Administration

Outsourcing - Middle 22
to back office Analyse This - SEPA Reinvesting the wheel The many
Cost saving and expertise today homes for cash collateral, page 20
are driving the outsourcing Richard Davies at Logica assesses
phenomenon, finds Ben Roberts. the initiative for 2009.

12 Technology
25
MEMBER - periodical Directory of services
publishers association
ISJ’s exclusive monthly listing
Hedge with an edge
of key service providers to the
- Technology - Anthony
Harrington surveys the product global asset services industry.
www.abc.org.uk
offerings for hedge funds
to renew your subscription
please telephone:
+44 (0)20 7299 7700
or visit... WWW.ISJ.tv
Leonique van Houwelingen
Panel member, page 17

1-16 ISJ38 APR5.indd 2 5/4/09 22:54:09


1-16 ISJ38 APR5.indd 3 5/4/09 22:54:10
Letters ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Letters
Dear ISJ

Prior to the financial


meltdown, Islamic private
This will impact the way
portfolios are managed and
centralized system (I mean
CSD or system of CSDs) in
“Only a Russian
banking was blossoming with
high-net worth individuals
require asset managers to be
both creative and flexible.
Russia. This system can be
established on NDC and
depository can
looking to invest their wealth.
Now with the credit crunch
One thing is clear, to
remain in the game, these
DCC base but this is another
decision.
be a nominee.
biting, banks are aiming to
increase customer deposits to
banks will need to offer
superior private banking
In the last two years, before
the crisis, we saw an increase
It seems this
level the value of their credit/ services via a customer- in the number of foreign barrier makes
deposit ratios. Here is one centric systems architecture investors in Russia. But after
perspective on what Islamic to meet the satisfaction levels the start of the crisis we’ve it difficult for
private banking could look of the high net worth market. obviously seen a decrease.
like in the future: Today we’re seeing overseas some investors
As individual Islamic n Dr. Mohamed Goneid, speculators return. Foreign
banks have their own Shari’a Islamic banking strategy investors prefer to invest in to enter the
committee, Islamic asset manager, Temenos government and corporate
managers could construct bonds, and equities (firstly in market”
portfolios around individual blue chips).
client ethics. In traditional Dear ISJ There are a number of optimising the infrastructure
Islamic private banking, other areas we believe need to (in particular the registrars).
this tailored service is only be looked at. Obviously, simplifying
delivered to ultra-high net The development strategy for First, the question about the infrastructure can
worth clients with large the financial market in Russia foreign nominees in Russia help increase and improve
portfolios. If Islamic banks requires the creation of a needs to be decided. As operations.
have to deliver this service to centralised accounting system you know, in Russia only a Third - possible changes
all clients, the cost of doing for the Russian securities Russian depository can be in the Russian tax regime are
so may skew the market in market. as nominee because only needed, i.e. the tax regime
the direction of ultra-high Because the Russian a Russian entity is allowed for foreigners and tax for
net worth individuals. prime minister announced a custody license. It seems dividends etc.).
Islamic private banks will that Russia plans to create this barrier makes it difficult These questions are all being
also need to ensure that all financial centre in five years, for some types of investors discussed in Russia at the
their investments comply you might think that a CSD - from the US, for instance – moment at the various levels,
with Islamic law. Banks can appear in the Russian to enter the market. But it’s i.e. FFSM, State Duma &
will have to create their market within this time. But not simply that the Russian Russian senate.
own indexes to reflect their in fact at the moment Russian authorities want to avoid
individual interpretations authorities don’t have a final liquidity problems in the n Mikhail Bratanov, Head
of Shari’a law. To do this, decision about the form of market. What they want is to of Securities Services
advanced Islamic banking the centralised accounting find a balance between the development for SGSS in
systems will be required system on the securities existence of foreign nominees Russia
to ensure all activities are market. and the need for liquidity in
Shari’a compliant. This is first important the market. Turn to page 15 for our
Finally, Islamic private question to be answered. Second - reducing the investor services report
banks may need to take a Once this is decided infrastructure costs and on Russia
more social view of their we can try to make a
investments, beyond the mere sensible estimate about
To express your views, write to ben@2ipartners.com or blog at www.ISJ.tv
accrual of investor wealth. the time needed to create a

1-16 ISJ38 APR5.indd 4 5/4/09 22:54:11


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1-16 ISJ38
Caceis advAPR5.indd 5
climb EN 203x267H.indd 1 5/4/09 22:54:11
8/04/08 14:20:01
News ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Custody Générale Securities Services’ charged for clearing in Europe. range of products and services
(SGSS) German business, (SGSS in areas such as direct debit and
KAG), won seven Master KAG* The price cut is on the back credit management, remittance
J.P. Morgan Worldwide Securities mandates and two outsourcing of increasing competition notification, fully automated
Services has been appointed by mandates in 2008. These in trading, specifically from enterprise payment workflow and
Marshall Capital Partners, to mandates bring the total of new multi-lateral trading electronic invoicing presentment
provide fund administration. assets under administration facilities such as Chi-X and the and payment (EIPP).
for SGSS in Germany to EUR55 growing demand for the all-in
Marshall Capital has USD2.5 billion (31st December 2008), cost advantage of efficient, Risk management requirements
billion of assets under an increase of 20% compared low-cost and robust central have extended amid the credit
management, comprised of to 2007. counterparties. crisis, with derivatives, stress
Russian institutional and tests and value-at-risk (VAR) now
international investors. It will apply to all trades integral to the mix, according
Fund Administration
submitted to EuroCCP for to a survey of asset managers by
The appointment is J.P. Morgan’s clearing and settlement. Sophis.
first for its Private Equity Fund Earth Capital Partners (ECP), EuroCCP currently clears and
Services in Russia. a new investment business settles trades executed on the The study revealed 63%
with a specialist focus on Turquoise, NYSE Arca Europe and of managers believed risk
The class action undertaken by environmental investment, SmartPool trading platforms. management had changed, with
two UK pension funds against selected Northern Trust to 35% believing it had changed
RBS in the US on the grounds provide administration services “significantly”.
Technology
of withheld information as to for its fund platform.
the health of the bank is “not Also, 73% believed it is essential
surprising”, according to David EXENET LLC, the IT consulting, to have an integrated view of
Paterson, head of corporate Clearing integration and outsourcing risk that includes derivatives.
governance at the National service provider, has launched Three-quarters will increase the
Association of Pension Funds ProServo™ Managed Support volume of stress tests and VAR
(NAPF). Broadridge Financial Solutions, for Alternative Assets, a tool reports that they carry out, and
has extended its multi-currency for small to medium-sized asset 65% will improve pricing and
The case – constructed by the Gloss securities processing management firms efficiently data models.
Merseyside Pension Fund and system to include Japanese and cost-effectively manage
the North Yorkshire Pension equities, convertible bonds and their IT. Reval, a provider for derivative
Fund and represented by Cherie subscription rights processed by risk management and hedge fund
Booth, QC, wife of former UK on-shore broker-dealers. Fundtech Ltd (NASDAQ: FNDT), accounting, has opened a Hong
prime minister Tony Blair - has announced the acquisition of Kong office and appointed of Will
been launched in the US to take EuroCCP, the European InterSoftware Ltd, through its Marsden as sales director, Asia.
advantage of the ‘no win, no fee’ subsidiary of The Depository UK-based division Accountis
class action principle, which does Trust & Clearing Corporation Europe Ltd. The opening marks Reval’s
not exist in the UK and can be (DTCC), will slash its clearing continued growth, expansion
expensive for the loser. fees from six euro cents to Following the acquisition, and commitment within Asia
five euro cents per side from InterSofware Bacstel-IP users Pacific that includes Australia,
It was revealed that Société 1st April - the lowest fee level will have access to a wider New Zealand and India. n

Latest mandates

Month Winner Client Location Assignment Mandate size

March Northern Trust Earth Capital Partners London Fund Administration USD5 billion
..............................................................................................................................................................................................
February RBC Dexia Creststreet Ass’t Man. Toronto Custody/fund services n/a

February L&G Investmn’t Man. Oxfordshire Co. Council London UK Equity Portfolio GBP850 million

February Sage Advisory Servs. Texas State University Austin, TX USD12 million FI core strategy

1-16 ISJ38 APR5.indd 6 5/4/09 22:54:11


ISJ Investor Services Journal New Model Banking - Regulation

Banking on revolution
First in our series and described the chance of the
wholesale side of financial institutions
looking at New Model leaving these shores for ECB and Federal
Reserve-regulated markets as “a real
Banking - the role of threat”. Specifically, the FSA’s failure is
the central bank. in its regulation of all areas of financial
service. Before, Congden notes, a
The Bank of England, the 315-year- stock broker would be regulated by an
old central bank for the United exchange, an insurer by the DGI.
Kingdom, must soon move down one of Within this there was self regulation.
the paths from the crossroads at which “With self regulation the industry
it stands. Its interest rate cuts – from authored the paper, explained to ISJ decides what structure it likes,” he says,
5.2% a year ago to barely over zero today that the governorship of Mervyn King before adding, “it doesn’t give it carte
- have seized headlines. The timeliness and the implementation of the FSA blanche”.
of its cuts has divided opinion, and have eroded the Bank of England’s For the Bank of England, and the
the effective use of such measures as a successful relationship with the banks. industry, to operate correctly, the Bank
counterpoint to inflation is in question. As previously lender-of-last-resort in should be re-empowered and privatised.
But other voices expressing deeper the case of a downturn, the central The banking consortium would act
issues have emerged in the last few bank would have known the contents as financiers, giving necessary capital for
weeks. As juries remain out as to what of banks’ balance sheets and the risks the central bank. Congden argues that
the ‘Authority’ in Financial Services one reason that the Bank has failed is
Authority really means in the context of “The FSA has its small capitalisation - “around GBP2
enormous bank losses, nationalisation
in all but name and plummeting public
become extremely billion” - where it needs to get Treasury
approval to loan money. Congden says
confidence after a decade of ascent for unpopular” the Federal Reserves asks for about 6%
financial services, a reappraisal of the of bank’s capital, using only half of that.
Bank’s role in the regulation of the City they were taking. The FSA, the Debt The Bank of England would need to
of London has been a leitmotif. Management Office and Governor ensure a profit could be made.
Governor’s facial hair King’s own outlook have separated But there would be additonal,
David Cameron, leader of the the Bank from this role and has been regulatory benefits of this system too.
Conservatives and the Government’s replaced by an emphasis on research. “Banks would resent incurring losses
chief opposition, on 22nd March Return of norm to pay for lending of last resort if one
advocated the reestablishment of the “This vision of the central bank of its members needed financial help,”
Bank’ authority over financial services. is deeply flawed and should return he says. “If you have a situation in
One movement of the [Bank of to the historical norm: a Bank with which all the banks were shareholders,
England] Governor’s eyebrow, he said, responsibility for banking supervision, then a situation such as over the last
should be an ominous sign for the banks a responsibility for lending last resort, five years where HBOS had a number
to fall into line. responsibility for managing public debt, of irresponsible property loans and
A more dramatic and detailed and where most of the staff are not Lloyds TSB was very careful, Lloyds TSB
extension to this view came from a paper economists but actually bankers,” he would know there would be a high risk,
released by the Institute of Economic said. “The tendency since the collapse and that they would have to support a
Affairs. Entitled ‘Central banking in a of [mortgage lender] Northern Rock lender-of-last-resort loan to HBOS. In
free society’, the study advocates the re- has been for the Bank of England to advance, they would tell the Governor
privatisation of the Bank, capitalised by continue to jettison the lender-of- and flag up what is happening.
a consortium of banking owners. last-resort role and instead have a “The Bank would have to go to
This would reverse its nationalisation special resolution regime for banks in HBOS and say, ‘you’re breaking rules, we
in 1946 and resemble the Federal difficulties, to strengthen insurance, to won’t lend to you when there’s a crisis’.
Reserve in the US. The paper echoed prefund the safest compensation – I So there are checks and balances within
Mr Cameron’s view that it should again deplore all of these things.” the system. No bank wants to bail out
wield industry authority. The FSA has become “extremely another bank. It’s putting is a structure
Professor Tim Congden, who unpopular” with the financial industry, that gives the right incentives.” n

1-16 ISJ38 APR5.indd 7 5/4/09 22:54:12


ISJ
ISJ 26
26

Profile ISJ Investor Services Journal


01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Cross assets, cross continents


Profile: Jon Robson
Thomson Reuters
“What is it that the market growing companies – “You needed both
wants next?” asks Jon Robson from the product and the business solution –
underneath the orange electronic snake how can we get you into business as fast
of ticker that curls around the Thomson as possible?”
Reuters building in London’s Canary He moved to Telerate – the market
Wharf. data provider of benchmark data on
“What they want is to see the whole fixed-income securities, currencies
picture of a trading environment.” and derivatives - and then become
This environment, spurred by EVP for Dow Jones Markets in 1997.
globalisation and technology, can be The same year was appointed as a
almost anywhere, changing the way non-executive on the board of inter-
international markets can operate. dealer broker Icap. Soon after he set
People are no longer tied to exchanges up MoneyLine, a hosted Internet-
for market updates. “Twenty years ago, based service that combined real-
you would go to an exchange and see time trading data with historical
the price of a security; when you left, content and was officially launched
you couldn’t see it.” in 1998. The company was a success
Robson, head of Enterprise Strategic in both Europe and Asia, with content
Business Unit of Thomson Reuters’ partners such as Dow Jones Newswires,
Markets Division, oversees a breadth of S&P and Interactive Data.
data services to provide this “picture” of is enthusiastic about the consultancy “People needed a means of
market activity for an equal breadth of that can be provided. “We can create a communicating with the market,” he
clients: from traders and risk managers customer advisory board focusing on explains, “and MoneyLine was able to
to hedge funds, stock exchanges and specific areas where information and provide that.”
wealth managers. His career has spanned experiences can be shared,” he explains. By September 2001, the company was
a number of continents, start-ups, “The global community needs to come in a position to acquire Telerate. This
innovations, acquisitions, and one of together in order to run well ordered created MoneyLine Telerate.
the biggest mergers in financial services markets.” He joined Reuters at the beginning of
between Thomson and Reuters at the Providing business solutions, and 2003 as global head of fixed income, and
beginning of 2008. not just products, has been a mainstay as a further foray into the fixed income
Thomson Reuters’ suite of enterprise- space, the firm bought MoneyLine
wide solutions can sit within a bank “The global Telerate at the end of 2004 in an
and, importantly, is neutral enough
to work with the bank’s existing
community needs estimated USD175 million deal.
Robson then became president of
technology. “Why not provide a means to come together Reuters America, leading the business to
for investment banks to link all those high profits in its United States, South
systems,” he asks, and compares this in order to run well America and Canada, and head of
central system to a “dashboard”. A
firm need not undergo an entire
ordered markets.” Reuters Focus Group Accounts program.
He relocated to London in 2008.
overhaul of their software, he says, of Robson’s career. One of his first This year, he sees potentially more
which has significant cost and training significant positions within the financial business servicing hedge funds.
implications. But for trading, portfolio technology space was at BIS Banking “The level of service prime brokers
valuation, pricing, compliance and all Systems, now Misys, across Europe and were offering changed - there are
the other functions that may have their Asia. It began a significant career stint in new opportunities for us to provide
own gadgetry, Thomson Reuters aims to the Far East. “I was asked if I’d like to go those services as hedge funds require
connect them all. to Asia and I thought it would be for a applications data and content.” n
But information is only one few weeks, not a few years.” Jon Robson is President of the Enterprise
component of knowledge, and Robson As a successful company, it serviced Markets Division at Thomson Reuters

1-16 ISJ38 APR5.indd 8 7/4/09 10:57:11


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Outsourcing ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Outsourcing
Cost saving and a well
of expertise is driving
the growth of out-
sourcing the middle
and back office, finds
Ben Roberts
The financial crisis has not changed
the capacity that technology and new
ideas can enhance institutions, even if
purse strings are pulled ever tighter. The
outsourcing of parts of the middle-to-
back office is one such example where
new software, new partnerships and new
structures of process can unite to help 2005 to 2007 there was nothing in the outsourcing deals, adds Goode. Larger
cut costs of institutions still hopeful for outsourcing space of any significance.” firms can take a longer time due to a
an upturn this calendar year. In the last six months, however, more entrenched bureaucratic process. .
Providers of outsourcing services the company has been “awash with What asset managers call the back
can range from boutique technology opportunities again”. “There has office, Pearce adds, a custodian would
developers to larger, post-trade lifecycle been a direct correlation between a call the middle office, and opportunities
specialists to banks. BNY Mellon is fall in markets and rising number of are there to offer the full service. “In
an example of the latter. The bank, outsourcing deals.” our asset servicing model we’ll support
conspicuous by its absence in the Shannon Goode at SS&C everything that’s post trade execution.
headlines of the financial crisis, has Technologies notes that asset managers So if you look at the trader lifecycle and
developed a broad range of asset pay fixed costs to deploy technology and trade confirmation, to compliance, to
services targeted at its peer group and the staff to run it, and this is unattractive settlement, custody, client reporting,
asset managers – essentially a custody in difficult market conditions in which performance analytics and transfer
mandate of administrative services the revenue from the assets they manage agency fund accountancy.”
without a pension fund attached. is variable. “As these assets go down, fees Long running link-ups of this sort
Daron Pearce, head of UK and to manage go down, but their cost to have further benefits, and there’s a
Ireland, says the growth of outsourcing support that remain fixed. Going to an strong relationship between providing
demand has grown with the credit crisis, outsourcing vehicle tends to match the an outsource service and providing
particularly for asset management firms. variable cost structure.” a custody service. “If you create that
Though it may seem more intuitive to Goode says the impulse to outsource accurate book of records, there are a
have external outsourcing partnerships has increased since the beginning of this number of things you can do with that
during the good years, and revert to year. In the few months up tot he end of enable us to have cost synergies that a
protective, in-house operations in the 2008, he says, managers were frozen in single asset manager couldn’t possibly
onset of a market downturn, the reverse the initial shock of the market decline. match,” says Pearce.
is the case. “I used the analogy that they were “For example, a fund manager
“In a positive market environment like deers in headlights – they weren’t managing a mutual fund needs to
where you are not struggling to cover doing that a lot as I think people were produce a daily NAV position on that
your cost, the doctrine is to have surprised at how drastically the market fund for publication. You need to have
everything in house,” he says. “We’ve went down. But I’m seeing quite a but a portfolio valued for the ongoing
seen it twice in the last decade. There of pick up in this quarter, people saying, management of that fund, a position
was a significant downturn in the stock ‘okay, time to make the move.” of the custody book and you need to
market after the dot.com bubble of 2001, Smaller firms, in which the decision provide a transfer agency record for
markets were depressed and we saw a maker is often the princoipal, are investors.
lot of deals come to market. Then from often able to move faster and strike “If you outsource all those services

10

1-16 ISJ38 APR5.indd 10 5/4/09 22:54:16


ISJ Investor Services Journal Outsourcing

to a single provider, they’re not going Transparency is a consideration Software as a service (Saas) is a
to create four different instances of the in outsourcing as with fund significant development in investment
book of record. We will have a single administration. Though a client will firms looking to outource at a low cost.
instance with which we price a mutual hand over its back office to a third party, Essentially, software is developed and
fund that will be consistent with the it wants to retain a view on processes, operated by companies like Calypso
custody record based on the same data says Kneale. and SmartStream, and leased to clients.
to provide automatic triangulation and Geoff Harries, director of product Smartstream’s Transaction Lifecycle
reconciliation with the transfer agency strategy at CheckFree, a solution Management (TLM) system has been
record.” provider for transaction banking that particularly progressive in the area of
Robin Kneale, head of strategy, includes fee billing and order entryoffers trade reconciliation, and in March 2009
Securities Processing Solutions, a capability largely through the extended it via SaaS of this product to
International, Broadridge, adds that investment management community, small and mid-sized businesses.
apart from cost, outsourcing service says: “There’s a whole trade lifecycle The offering helps firms of this size to
opportunities can be sought from new - from trade capture, enrichment, boost automation levels.
entrants to the market - small traders, validation, verification, routing before “Customers of all sizes, but
broker dealers or portfolio managers you get to settlement - to ensure stock particularly those in the mid and lower
without a comprehensive middle and or cash moves effectively. Ultimately, tiers, no longer have to compromise
back office. anything we do in giving greater on the tools they use to improve
“It’s fair to say that in the UK those visibility or transparency of where a efficiency, lower transaction costs
that have outsourced have tended to be trade sits in its lifecycle would allow and reduce operational risk,” said
small- to medium-sized companies,” people to better management their Philippe Chambadal, the new CEO of
he says. In today’s market environment cash position as they would be able to Smartstream, at the launch of the TLM
there have inevitably been fewer see with more certainty if it has been OnDemand system.
start-ups, he says, though the growth confirmed or unconfirmed.” Smartstream discovered through
in merger activity may lead to new Pearce adds that outsourcing is research that 65% of financial sector
revenue streams for providers. “Merged part of a circular function: from the companies were used SaaS in more than
companies would not necessarily have a asset manager client to the outsourced two key business areas, compared to
common infrastructure for transaction custodian back to the asset manager. The 52% of all companies in the survey.
processing and so may consider [asset manager] execute the transaction, Alastair McGill, marketing drector
outsourcing,” he says. “Also, banks might they tell us about the transactions, at Smartstream, told ISJ that a SaaS
often have a single infrastructure for all we confirm with their brokers in the outsourcing offering for smaller firms
the different parts of the bank in terms market, we settle it either ourselves or would help “level the playing field”.
of trading and brokerage. When a part of instruct others to make a settlement and Pars Perawal, UK Investment
that bank splits from the rest, it will no report back the updated position so they Management, Real Estate
longer have that facility.” can continue to trade their portfolios. and Alternatives Leader, at
Broadridge’s outsourcing division, So it takes out all the traditional asset PricewaterhouseCoopers, said at a recent
Ridge Clearing & Outsourcing Solutions, management back office.” press briefing in association with the
specialises in clearing and settlement To complete the picture, outsourcers CBI expects outsourcing to continue.
services. Ridge’s services are a significant will themselves outsource to service Daron Pearce at BNY Mellon emphasises
line of business for the firm. providers. Harries says CheckFree that asset management will inevitably
By bringing together a lot of clients supplies to “seven out of the top ten” want to focus on its core function. “They
we can make their volumes of trades global outsourcers. “We deliver [our are paid entirely by the value of the asset
processing cost effective, explains trade lifecycle solution] to a number of they value and those value are massively
Kneale. A transaction-based fee structure the largest asset servicers in the world depressed right now”.
is typical, he adds. The Ridge service is who use it to support other investment Harries also anticipates an increase
fully established in the US market where managers.” in outsourcing activity. “If someone’s
it serves over 100 correspondents and He adds that outsourcing mandates looking at a new asset class they want
is now growing its presence within the can be very specific, often reflecting the to mover into – ten years ago youd
UK market through its FSA-authorised deficiency in expertise inthe operations naturally create an operational cap to
entity. The rest of Europe has the of those looking to outsource. Further, support it in house. That’s really not the
potential to be a longer-term target, adds he has found that frms will often case anymore. I think people would have
Kneale, though the clearing space is a outsource by asset class. “While they to rationalise carefully why they’d want
competitive environment. In Germany, might be happy to run their equity to develop an in-house capability today
for example, a number of transaction operations, they may not want to run if they can procure that service from
banks provide clearing. their derivatives operation.” established providers. ” n

11

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Hedge Fund Technology ISJ Investor Services Journal
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Hedge with an edge


Anthony Harrington surveys the technological
solutions available to hedge funds.
Like a game of Cluedo (Clue for North huge bespoke costs,” adds Delage. variations in their demands. Fred Jacobs
American readers), cautious investors ‘Hosted’ services – ‘pay as you go’ at SS&C says smaller funds need “a lot of
want to know the motive, weapons and models where the software provision is hand holding” as they often don’t haven’t
whereabouts of hedge funds. Managers combined with a web-based solution - fully hired their staff so you’re helping
and CIOs can rightly expect inquiries, are growing in popularity as funds look the with structural Infrastructure
if not outright insistence, as to the to avoid large up front payments nor pay such as reviewing offering documents
investment methodology. The funds will for maintenance. However, Delage says and helping to establish procedures
look to systems providers to help them paranoia over data remains a powerful procedures. He adds, however, that small
achieve the kite marks of transparency “brake” on moves to application service funds may still be trading the esoteric
and compliance – no matter how provider (ASP) style solutions. “People items of larger players, despite having
onerous the new regulations might be. get paranoid about their data being fewer strategies. Larger fund families
Frequently the demand for held hostage by the service provider. often have multiple strategies - long/
transparency comes from investors. Fred But hedge fund managers are under short, bank debt and fund of funds,
Jacobs, head of business development tremendous cost pressure, so ASP is for example - that demands a complete
for alternative investment services at coming up for discussion more,” he says. platform from the service provider.
SS&C, describes investors - though The challenge is to find or agree Servicing larger funds often leads to
inmportant before the crisis - have been pricing mechanisms with the clients for developments on the service side, in
elevated to the level of “king”, and have the more complex derivatives. Delages fact. “One of our largest clients asked
been scrutinising a hedge fund’s service cite Brazilian swaptions as an example. to account for German tax, so we wrote
provider. “The more you require a fund A swaption, or swap/option confers the that into our systems.”
to do from an operational standpoint right, but not the obligation, to enter John Bourse, managing director of
the better it is for some one like us that into a swap within an agreed time frame. SkyRoad, another portfolio management
has all the bells and whistles,” he says. “Strange” foreign exchange systems provider, says that there is
Hugues Delage, product manager derivatives are another area - Horizon tremendous demand from both risk
at Horizon Software, which provides has its own quantitative analysts who managers and traders for complete
portfolio management, valuation and build models for pricing these and other visibility on risk positions. “The risk
pricing and risk management systems instruments. “What you need is both the manager is looking at macro type risk
for hedge funds, finds the sector ability to propose mathematical models moves and the trader wants to analyse
particularly demanding. “In some ways, that work, and flexible architecture that intra-day risk. We can provide this and
whatever works for hedge funds will allows you to use other people’s model we can also consolidate it across traders,”
work for traditional funds as well, but libraries, if this is the way they want to he says.
you have to be clear that a system that is go. With our system you can plug and This last point can be very important:
good for UCITS III compliance will not play different models as you require.” a hedge fund may have three traders all
work for hedge funds. You need much Value at Risk modelling - the using very different strategies, but with
more specificity, with a broad range of probability that a portfolio’s mark-to- the same exposure to the same stock.
instrument types,” he says. market loss over a time period would This needs to be consolidated so that
But budgets for such services are exceed its value - and stress testing are the risk manager can see the overall risk
undoubtedly under intense pressure. two further considerations. “In a high to the firm posed by that accumulated
“There is a great deal of cost reduction volume market, VaR can introduce position,” Bourse says. As with Horizon,
going on across the sector at the errors, so many investors these days will SkyRoad’s valuation model can be
moment. People will sacrifice flexibility require a hedge fund to produce stress extended to embrace additional trading S
right now if it gives them a cheaper tests for them before they invest – so models, including the client’s own R
license and lower maintenance costs. they can see events like Lehman or 9/11 trading model. SkyRoad’s approach is a
They are looking for plug and play modelled for them,” he says. pure ASP, using Citrix terminal server
architectures that can be set up without Different sized hedge funds also have to deliver services to the client’s desktop P

12

1-16 ISJ38 APR5.indd 12 5/4/09 22:54:18


1
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Definition:
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SS&C Fund Services


Recognized as the source for independent fund accounting and
administration for hedge funds, fund of funds and private equity.
Phone: +44 20 7614 9696 · Web: www.ssctech.com · Email: solution@sscinc.com

1-16 ISJ38 APR5.indd 13 5/4/09 22:54:19


Hedge Fund Technology ISJ Investor Services Journal
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anywhere in the world the client has “A typical system would just have a field However, Calder points out that the
broadband access. on the screen for the trader to enter the outperformance of hedge funds over
“The value-add we bring, apart volatility, but volatility changes all the equities in February 2009 was one of
from the day-to-day services, is to help time. We work with the client to agree the highest it has ever been. “One of
the client to understand the life cycle where that information is going to come the problems in forming a view on the
flows of trades,” says Bourse. “If a trade from and how we are going to compute sector is that there is no definitive global
is unwound or terminated, it shows it,” he says. measure. Last week I saw one estimate
them the relationship between the Each instance of the software is that put assets under management
trading system and the prime broker, for unique, so that if there is something (AUM) in the sector at USD1.8 trillion,
example, or the administrator. proprietary about a client’s calculations, and I saw another in the same week that
“How does our system help a hedge it is only implemented in that particular put AUM at under USD1 trillion. That is
fund to become more transparent client’s system and none of SkyRoad’s a huge margin of error,” he comments.
to its investor base? We provide the other customers get to see it. Robin Strong, director of market
consolidation. We capture all the Stuart Calder, director of Linedata strategy at Fidessa LatentZero, which
activity of the fund and centralise and Services, says whatever shape future provides solutions for global asset
consolidate it, which makes it much regulation takes for hedge funds, having managers management industry and
easier for the hedge fund to be as increased control over the exposure the smaller investment managers and
transparent to its investors as it wants or fund is taking on derivatives will be a hedge funds, reveals consultants such
needs to be,” he says. “given”. “Regulators are really going as Mercer and Watson Wyatt say their
Bourse says though it is too early to to want to know what steps funds are clients are increasingly focused on
identify the new regulatory framework, taking to manage and support their risks “demonstrable business control”. This
transparency will be a big part of and derivatives will be a big part of this. means industrial quality compliance and
the picture. He also expects funds of “This new era has really accelerated risk control and hedge funds who want
funds to either want to do more of the demise of the spread sheet as to attract investment need to be able to
their own trading, or to demand more any kind of a critical tool in risk or demonstrate in a very practical way that
transparency from the funds that they compliance. From now on funds need they have the systems in place to satisfy
invest in. “We expect this to be a very vendors with fully fledged risk and the concerns of investors, he comments.
big trend in the next year or so,” he compliance technology,” he comments. He gives as an example a rule
comments. “Risk and compliance, in many which says that all bonds should be at
Part of the challenge for systems ways, are two sides of the same coin. least single-A rated. A manager who
providers is that hedge funds come Going forward, hedge funds are going thinks a B-rated bond might be a good
in all shapes and sizes. This has been to have to operate like mini institutions, investment could enter into a CDS swap
a hindrance to the ASP style services or like long-only funds,” he says. In that would guarantee the B-bond as an
becoming widespread. As Bourse points fact, he adds, long-only investors have A-bond and that could either be allowed
out, most ASP solutions demand that started to take shorter positions and use or disallowed according to the rules set
the client fits the standardised solution. derivatives, while a number of hedge up in the system.
His approach is to adapt the solution funds have adopted long strategies. “Hedge fund managers need to have
to the client and the base system is “The big difference between the all of this integrated on a pre-trade basis
highly configurable. However, he argues sectors is that hedge fund strategies and so that they can get a warning that will
that technology is only half the battle. portfolios are still much demanding, prevent the trade from happening, if
“You need people with a great deal of as are the types of instruments traded. it is outside the parameters allowed by
experience of the hedge fund industry We have all been looking to make our the fund – and blocking the trade at the
and of operational and risk system type platforms much more derivatives aware outset is a much better solution than
processing,” he says. “If the provider and they all need to run off reliable having to make a forced sale when you
makes a wrong decision about how a versions of the data.” discover that it is outside the rules.
trade should be processed, it can be very Hedge funds have seen massive “Today, it is all about how you
expensive for all concerned.” outflows as investors, spooked by the actively manage your risk exposures.
Data feeds such as volatility downturn and by the failure of some Institution managers used to put
information are still sought, particularly hedge fund strategies, have looked to their money into funds with good track
when a swaption strategy needs to price repatriate their money. Assets under records. Now they put their money
an option. Solving this problem means management in the sector have shrunk into funds with good controls and good
working with the client, explains Bourse. by as much as 50%. track records.”n

14

1-16 ISJ38 APR5.indd 14 5/4/09 22:54:19


ISJ Investor Services Journal Russia

Climate not changed


Foreign investors and fears regarding government action,”
says Stephens. “This has in some sense
Perhaps most significantly, the
country lacks a central securities
service providers alike precipitated the crisis in Russia. The depository - one characteristic that
controversies of Shaklin and BP/TNK tends to divide ‘developed’ and
still face challenges in have become the litmus test for foreign ‘emerging’ markets. Ian Twine, network
Russia. investment into Russia, highlighting the
rule of law, or the lack thereof.”
manager at HSBC who has overseen the
Russian operation for nearly four years,
Another Russian failure will be the Yet where investors go, custodians says there has been talk of a CSD since
last thing the strained Western financial must follow. The country now has a 1998. Now the date of implementation
sector wants right now, especially with number of domestic players, such as has been set for 2013, though in light
a backdrop of a G20 Summit that Rosbank (owned by Societe Generale), of this forecast he says simply: “don’t
may help mend diplomatic rifts if not and VTB, along with the established hold your breath”. For the two main
produce cogent regulation. global brands of Citigroup and depositories in the country - the DCC
The World Bank last month forecast JPMorgan. Domestic custodians usually and the NDC - any single system would
an economic contraction of 4.5% for the service domestic players, and foreign leave one of the two “with their nose
country on the back of the decline in oil custodians - such as ING - tend to their out of joint”.
price, though the Russian government No CSD puts a premium on trading.
itself estimates a more moderate 2.2%. “Foreign players Traditionally assets are held in the name
The OECD expects a sharp reduction
in real gross domestic product
don’t have enough of the sub custodian in the local market
as the trading process falls short of the
throughout this year with a pick-up in understanding of kind of standards set by the US 1933
2010. Inflation - 13.9% at the time of Securities Act.
writing - should decline by the end of the local clients” These assets are therefore held
this year.
It has led to an abrupt volte-face for
Rami Bourgi, SGSS with the accounts with the company
registrars. If a security is traded between
the Western banks that clamboured for two funds that have different sub-
market exposure before 1998. custodians, and therefore different
This decade, they crept slowly back to registrars, there has traditionally been a
Russia without the pomp but still with high re-registration fee, often as high as
hope of profits - attracted in particular 20 bps for the value of the transaction.
by the 70% devaluation of the rouble. Twine claims to have occasionally seen
When Lehman Brothers collapsed, registration fees of up to USD40,000.
custodians such as Citi, ING, and Societe Just a few years ago, explains Twine,
Generale saw capital flight from Russia there were as many as 500 of these
at around USD12-16 billion a week. registrars making a lot of money from
But Dr Elizabeth Stephens, head of charging this fee.
political risk analysis at Jardine Lloyd The only way to avoid this cost is to
Thompson, sees many differences register the securites with one of the
between 2009 and the problems eleven two main depositories. Twine says his
years ago: “The big difference between team has been looking at using the DCC
today and the defaults in 1998 is that to hold client assets. HSBC is close to
today the Russian government is trying agreeing with ING, its sub custodian,
to stabilise the value of the rouble. It has a legal agreement whereby it can offer
been relatively successful but we have to its London clients delivery-versus-
put it into context with falling value of payment, a vital and common element
other currencies.” of Western market as a precaution to
The Russian stock market has fallen counterparty risk.
70% since February, there has been a own book, or act as sub-custodian to However, he says, it would mean the
huge destruction in value for investors Western peers. This divide originated client would have to register the assets
and billions of roubles have been wiped during the 1990s, when new entrants to with the DCC. These depositories
off the value of shares. the market failed to be satisfied with the carry risk as they are
“It’s not just financial fears but also local infrastructure. undercapitalised, he says, though

15

1-16 ISJ38 APR5.indd 15 5/4/09 22:54:21


Russia ISJ Investor Services Journal
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there is no re-regitration fee. “We don’t


recommend the use of the DCC to Russian presence: SEB
hold client assets as they are not 17F5 Goran Fors, global head, custody sales
compliant, but if the client is willing to
take that risk and sign the addendum to own custodian clients the time being, there has
the custody agreement we have in place we over time will offer been slower investment
with them, we will hold the client stock this to other custodian into markets that have
in the name of the DCC.” and broker dealers that more ‘emerging market’
Twine adds that the risks associated invest into the market. characteristics but
with the depositories, along with the it’s still an important
lack of internationally recognised How are the mutual and market.
audit, causes many investors to pay the pension funds invested ? The market
registrar fee instead. However, he says, When did you establish a infrastructure still lacks
a few clients have signed this agreement presence in Russia? Mainly equities. a number of items,
and a few are discussing it. “If I go out There has been a high such as risk mitigation,
to clients and say, ‘we can provide you We bought a smaller percentage of shares delivery versus
with DVP’, I think evey client investing bank three or four years going into the energy payments, and there are
in Russia will be saying that’s what they ago that had its base sector. A fund or pension still issues as to how
want; they don’t to send two instructions in St Petersburg. Out of fund would invest in a corporate events are
– one for stock, one for cash – and they that we built a number broad rage of papers, we handled.
want settlement in three days.” of business areas, and have several hundreds of It does not have a
The lack of set regulation for last year we opened up underlying securities for proper central securities
corporate actions is another stumbling a sub custody service our clients. depository. Delivery
block. If a company has an annual for foreign institutions versus payment would
general meeting, it is frequently only entering into Russia. We How do you assess the mitigate the risk for the
obligated to pay dividends within the have two businesses, the market? counterparts, a lot of the
calendar year, rather than a typical global and sub custody. trading is done over the
Western standard of 30 days after the The Russian market has counter and the payment
meeting. What is the make up of grown enormously if you for trades are done in
But according to Ramy Bourgi, head the clients? look one and a half years US dollars outside the
of emerging markets development, back. country.
SGSS: “Foreign players don’t have It was a smaller After September, It’s more complex
enough understanding of the local operation focused on the Russian market has to serve local clients -
clients because traditionally they have retail business but also come down quite a lot your setup needs to be
only catered for the global book.” does corporate business. and has been one of the different, everything
The French bank’s partnership with We have a big client biggest fallers in the from client procedures to
Rosbank appears to be a sensible bridge base in Nordic countries world. Nordic customers reporting systems.
between foreign and domestic. that invest into Russia, activity has come down Over time we’ll be
However, though custodians like it’s a big market for the along with asset values. looking to service local
SGSS are still winning mandates for mutual fund business. The interest is still there; clients but that will be at
future investment into Russia, the In servicing our it’s more long term. For a later stage. n
missing pieces of the infrastructure
jigsaw is difficult to create any kind of
momentum of foreign inflows. Setting nothing settles on this basis because of have paper allotment forms.”
up systems that are Swift compliant are the potential re-registration elements”. However, in four years up the present,
therefore vital for winning future foreign The market, though dematerialised, is a change to mindset, if not operations, is
mandates. still a manual process. “The instruction evident. Twine cites the liberalisation of
Bougi says fewer registrars and might come through onto the lender’s the Rouble as an example.
a major central depository are vital system as STP, but thereafter it’s a very “We’ve seen more possibility for
additions for any emerged market. manual process.” Twine compares the foreign investment in Russia. I suppose
Twine says the concept of a contractural system to that of London in the 1980s. that’s down to the Russians themselves
settlement day is “irrelevant” in the “I’ve been to a registrar in Russia and it that they saw opportunity for them
Russian market - “everything is dealt is very much like in the UK then, where when Western financial companies want
with on a T+3 basis, but predominantly you queue up round the block and you to invest in their country.” n

16

1-16 ISJ38 APR5.indd 16 5/4/09 22:54:22


ISJ Investor Services Journal Head 2 Head

Head 2 Head

Sebastien Danloy is global head of sales and Leonique van Houwelingen, Head of
relationship management at SGSS. He has Relationship Management, Netherlands at
worked at the European Court of Auditors in BNY Mellon Asset Servicing.
Luxembourg, State Street and BNP Paribas.

Benelux fund administration


Experts from two leading well in a global context.
providers in the Benelux region But they are greatly varied
examine fund administration. markets, with numerous
Belgium, the Netherlands and challenges for the provider of
Luxembourg have weathered fund administration, from
the financial crisis comparatively clients to regulators.
1. In declining markets, is it possible to strike a balance between today only a limited number of providers that have these capabilities
relaxing fair value if needed in the short term with installing this and they should benefit from their expertise in that area.
principle in the long term?
VAN HOUWELINGEN: This is difficult to answer, as ultimately that will
DANLOY: Fair value is an absolute requirement. Until now, most fund have to be determined by the market. If an asset is illiquid, the ques-
administrators have been using book cost or counterparty pricing to tion then is what is a fair price? In many cases you will find a vendor
value unlisted securities. These OTC and structured instruments were that is willing to provide a price – but if there is no party willing to buy
not independently valued and this has led to some artificial valua- that asset, then the price remains merely theoretical.
tions. It is essential that fund managers and institutional investors
accept to use third party independent valuations and that service 2. The investment landscape in the Netherlands and Luxembourg
providers offer this solution to their client base. OTC derivatives and in particular – including for fund managers of pensions – have a
structured product pricing are two elements that are key. There are strong investment preference for alternative assets, such as swaps
17

17-23 ISJ38 APR5.indd 17 6/4/09 14:51:11


Head 2 Head ISJ Investor Services Journal
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and socially responsible invest- be tailored to meet individual will demand total transparency
ments. What challenges does clients specific needs. Accord- “It is essential and that is difficult to obtain. On
this pose for the administrator?
DANLOY: As far as Societe
ingly, we stay very close to our
clients – indeed, our role today that fund top of that the risk appetite of
investors has obviously changed
Generale Securities Services
is concerned, it does not pose
has become far more consultative
in nature than has historically
managers and significantly and therefore UCITS
funds will become more attractive
any specific issues. We have been the case, we are now far institutional
the capabilities to service fund more embedded in our clients’
businesses. Of course, this also investors 5. The FvGR pooling structure
has been an influential factor in
“Given today’s means that you have to commit accept to use Luxembourg and the Nether-
lands. Have you seen increased
markets, it to the required reinvestment
in technology and intellectual third party, client demand for reporting
is generally capital year after year, and that
is something many smaller or less independent
on underlying funds, and how
significant is the challenge in
understood focused providers are finding in-
administration” providing this?

that many of creasingly hard to countenance.


Sebastien VAN HOUWELINGEN: There is in-
the traditional 3. Post-Madoff there has been
increased market emphasis on Danloy, SGSS
deed increased client demand for
and an attendant trend towards
‘leveraged’ on independent adminstrator,
particularly for hedge funds. erlands, and in particular in re-
more transparent reporting, with
clients starting to move away
hedge funds Will independent administra- spect of Dutch pension funds, we from master trust unitisation.
will disappear” tion and audit become a manda-
tory part of the Benelux region?
have definitely seen a trend to-
wards increased regulation to en-
Moreover, investment managers
are also driving this trend as they
Leonique van DANLOY: The lessons learned
able the supervisors to gain more
insight into funds’ accounts. We
seek more efficiencies through
the establishment of pools such
Houwelingen, post-Madoff are that there is a will see more regulation aimed as FvGRs.

BNY Mellon massive responsibility for the


depositary bank which ultimately
at ensuring similar oversight to
that seen in the UCITS context, The challenges are two-fold.
becomes responsible for invest- to protect the individual pension Number one, technology: your
managers with an end-to-end ment decisions made by the fund premium payer. It could be that systems need to allow the admin-
solutions covering listed and managers. When you look at the independent administration and istration of the securities at the
OTC derivatives. Several pension fees charged by both parties, audit will become mandatory, investment level, the pool level
funds already leverage this they surely do not reflect the but even now stakeholders will and the participants level. Most
particular expertise we have built reality of the responsibilities of typically ask for independent of the larger global custodians
in-house over the last few years. each party and of the indemni- auditing of a fund’s accounts. now have the systems in place to
Compliance for SRIs is probably fications expected. That is the provide this level of administra-
the one element that needs to be main point we can learn from this 4. How will increased regulatory tion.
carefully looked at. story. Whether the regulations attention affect hedge funds’ Secondly, data – when it comes
will be strengthened and will no activities in the region and to collating the data from all
VAN HOUWELINGEN: The chal- longer accept in-house adminis- their investment operations investment managers, in particu-
lenge is always to keep pace with tration service, this remains to with more mainstream funds lar the specialised investment
the creativity of the front office be seen. such as UCITS? boutiques, the fact that these
and ensure that our products and managers earmark their invest-
services are flexible enough to VAN HOUWELINGEN: In the Neth- DANLOY: Hedge funds are in ment information as confidential
the radars of regulatory around may pose a challenge. Global
FactLines Europe. A general framework on custodians like ourselves have
The net assets of Luxembourg UCIs increased by 0.76% a global basis needs to be agreed an advantage here as are seen as
if we want to see any significant independent and neutral.
in January 2009 to a figure of 1 571.534 billion euros
changes in that area. It is not
(source ALFI). so much the hedge funds itself One additional challenge that
which are an issue in my view will not go away is that the local
BNY Mellon has more than 25% of the pension market tax authorities in the different
but the fact that hedge fund
in The Netherlands. managers were not necessar- markets involved will have to
ily regulated. This is the area in recognize the tax transparent
Total asset size for the pension funds in The Nether- which international coordination status of the FvGRs. n
lands is over EUR 700 billion. and action is required.
Belgian pension funds suffered a negative return of VAN HOUWELINGEN: Given Next issue:
20.5% in 2008, the Belgian Association of Pension In-
stitutions (BVPI) has revealed. For reference in 2002,
today’s markets, it is gener-
ally accepted that many of the
Custody
losses were averaged at -12.1% traditional ‘leveraged’ hedge networks
funds will disappear. Regulators

18

17-23 ISJ38 APR5.indd 18 6/4/09 14:51:11


ISJ Investor Services Journal Securities Lending

Reinvesting the wheel


The reinvestment of cash collateral
in securities lending has been
a mainstay of market debate,
finds Brian Bollen.
that rebate and what has been earned by
the investment of the cash represents the
client’s earnings.
Cash collateral and cash reinvestment
have been around since the inception of
securities lending, but many, if not most,
of the big issues arising from
the latter.
The important thing is to understand
the many options that are available
relating to the treatment of cash
collateral. A very conservative approach
will mean doing a government repo or
a time deposit with a highly reputable
Cash collateral pools and their work - Northern Trust’s decision to help bank (if such a creature can be deemed
reinvestment rarely escaped the its clients cost the bank USD515 million. to exist in this day and age), cutting
investment headlines last year. Two But the cash hit taken to protect client maturity and credit risk to an absolute
lawsuits against Northern Trust – from wealth is probably worth it to protect its minimum. A more adventurous
the University of Washington and BP - reputation and its relationships. approach might be to invest in a money
based on the losses incurred on their But it is the providers rather than fund, a registered product or a separately
securities lending caught the eye. More the users of the service who are the managed account with riskier guidelines,
recently, it was reported that as much convenient scapegoats. Mark Payson, creating maturity risk and raising
as 90% of US pension plans have been managing director at Brown Brothers credit risk by introducing into the pool
hit by valuation in the cash collateral Harriman, says: “In some programmes, assets from further down the credit
pools, causing some custodians to the focus was pushed too far away from curve, such as GE commercial paper or
impose redemption restrictions on the securities lending and towards securities paper issued by a very small company.
underlying index funds. financing, which stresses the potential The possibilities have been many and
Some custodians took cash as proceeds from cash reinvestment.” various, limited only by the imagination
collateral and invested it in their in- Securities lending is still a relatively of the parties involved on the issuing
house money market funds – which low-risk product if the right approach side of the equation and the risk appetite
could be arguably seen as a conflict of is taken, he adds. “There may have been (i.e. greed) on the investing side.
interest. Should agent lenders be able a disconnect between the philosophies While the collateral investment
to earn additional fee-based income, of the agent and the beneficial owner spectrum is broad, it is the areas of
at their clients’ risk, by funnelling cash in some cases. Looking back, some maturity risk and credit risk that have
into their own vehicles? At least some beneficial owners may wish they had historically created the greatest problems
of those funds, in turn, were invested in asked more questions, and reviewed the for the securities lending market. They
Lehman Brothers or Lehman Brothers- acceptability of their securities lending did so again last September. “Neither of
related paper, now worthless, or in other programme more often. Most beneficial these is related to the BBH programme,”
‘toxic’ assets such as mortgage-backed owners were not looking to be involved Mark Payson is quick to point out.
securities. in a high-risk strategy, but in some cases, “We are arguably one of the only
As a result, clients had to hope their this was what resulted.” agent lenders not to have issues with
custodian would protect them from After a rebate is paid to the broker for the challenges presented by collateral
unindemnified losses. For some it did the use of its cash, the spread between reinvestment. We are on an island with a

19

17-23 ISJ38 APR5.indd 19 6/4/09 14:51:12


Securities Lending ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

limited few and are happy to be on that engagement and supervision by many of deemed to be still good, challenges arise
island.” John Donohue, chief executive our clients, which we think is a healthy from the pricing perspective. An asset
officer of Carne Group, advisers to the development. We have seen a small that might be worth 100% if held to
asset management industry, describes number of people leave the securities maturity might be worth only 80% in
cash as the worst form of collateral, lending programme, but we have also the event of a forced sale, undermining
while hailing Treasury bills as the ideal. seen a number of those subsequently the long-standing principal selling point
“One good lesson to be learned from return to it. The industry did, after all, of money market funds: the belief that
the financial crisis is that cash is not a hold up pretty well for the most part. they will never break the buck, that is
protected asset,” he says. Most lenders came out of the Lehman the net asset value of such a fund will
For Oliver Madden, technical sales, default reasonably unscathed and never be below 100%.
securities lending, at RBC Dexia Investor together for those who want ed to exit, The impact upon securities lending
Services Trust, the overriding lesson being able to do so will be important of even unrealised losses in collateral
is that the market need to get back factors in deciding whether or not to pools cannot be underestimated. The
to basics. “There needs to be a clear return.” losses are not indemnified by agent
understanding by every individual Here’s how it works. An agent lenders and even ‘sophisticated’ investors
participant in securities lending and cash lender lends out USD1 billion of client are beginning to grasp the reality that
reinvestment of their own objectives securities to a broker-dealer, takes there is, in the time-honoured cliché,
and their own risk/reward parameters,” USD1bn cash as collateral and reinvests no such thing as a free lunch. “If
he says. “Those beneficial owners who that cash in a money market vehicle. At they didn’t fully understand the risks
continue to accept cash collateral will before, money market participants
need to monitor the cash reinvestment “One good lesson are now beginning to understand the
more closely in future.”
The underlying blame for what
form the financial potential for losses,” says Mark Payson.
“Contractually beneficial owners have
happened – and don’t we all like to crisis is that always owned the risk associated with
point the finger of blame sometimes
- lies somewhere between the two
cash is not a collateral reinvestment; however, I think
what is coming into question is whether
functions, comments Chris Oulton, chief protected asset” they knew the suitability of where
executive officer of Prime Rate Capital John Donohue, that collateral was being reinvested in
Management in London. “Money
market funds are investment products, Carne Global relation to their own risk profile. While
lenders own the collateral risk, agents
not banking products, and inappropriate also have a responsibility to educate
portfolio construction by investing some point the broker-dealer wants to lenders on what those risks are.”
in, for example, paper from a poorly return the securities, and receive its cash Even when there is no legal
rated issuer that is already on credit back. In recent times the industry has obligation to step up to bail out lenders,
watch, would be beyond most fund been challenged in the repayment of the the question of the continuation of
parameters. You hope your custodian cash for two reasons. profitable relationships suggests that
will hold the right mix of assets, but One, some of the collateral agent lenders would be well advised to
institutional investors are assumed to reinvestment has been into pools dig deep. Whatever an agent lender’s
more sophisticated than their retail containing Lehman Brothers commercial decision, the issues impacting securities
counterparts, and they should do their paper, or collateralised mortgage lending collateral pools are in many
best to ensure the products they invest in obligations, that have proved to be either ways a microcosm of wider market
are fit for purpose.” completely worthless or not paid back sentiment: risk has been severely
Some lenders in the marketplace dollar for dollar. underpriced and the market is now
would recognise now that perhaps Two, the broker doesn’t yet want overreacting in the opposite direction.
they should have spent more time to return the securities borrowed, but In such a febrile atmosphere, the
on the supervision and management the falls in market values of the pool in likelihood is that owners will begin to
of collateral reinvestment than they which its cash has been reinvested mean treat securities lending with a greater
actually did, adds Paul Wilson, global that a $1bn of collateral is suddenly deal of respect, and come to view it as an
head of client management and sales worth only $600m. When the lender asset management product rather than
for securities lending at JPMorgan. does need to generate liquidity to repay as an adjunct to custody.
“Since the events of last year we have the broker-dealer, there is a problem. Wayne Burlingham, global head of
seen an increased level of interaction, Even with assets where the credit is securities lending at HSBC Securities

20

17-23 ISJ38 APR5.indd 20 6/4/09 14:51:12 GSL Su


GSL Summit| Global
Securities
Lending

neW DaTe

Lending for Thursday,


Liquidity 14th May 2009
In parched markets, liquidity must be
widely sought, and securities lending
can be a vital source. Beneficial owners
(pension and insurance funds in particular)
can only understand the wider benefits of
this liquidity if they are fully engaged with
the lending process and understand the
potential, the risks, and have opportunity
to voice their concerns and views.
GSL invites readers to an informative
afternoon to discuss this topic along with
wider issues of transparency, risk and
returns at this crucial time.

DaTe
Thursday, 14th May 2009

LocaTion
Four Seasons Hotel, canary Wharf, London

1:30 PM
Registration/coffee

5:00 PM
Drinks Reception

The event is free of charge to attend


but by invitation only. Please contact
James@2ipartners.com or visit www.
GSL.tv for invitation request.
28

GSL
17-23Sum Lend4Liq
ISJ38 AD.indd
APR5.indd 21 28 05/04/2009 19:04
6/4/09 14:51:13
Analyse This ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
56

Services in London, says lending should Analyse This:


SEPA today
extract the “full intrinsic value” of
securities but there should never be
capital at risk. It has caused the bank to
eschew cash collateral. “In specific cases
agent lenders may have been too focused
on just the extra revenue instead of the instruments, which the ECB is pushing
increased, associated risk,” he says. “But for, banks must look longer-term.
the pursuit of that extra revenue has left Banks are no strangers to updating
a large number of their clients, rather systems to accommodate new
than themselves, sitting regulations and standards. In the past,
on potential losses from cash they have been inclined to implement
reinvestment. Moreover, many tactical fixes to legacy systems. Today,
lenders are now locked into custody this strategy can lack foresight. Not only
arrangements they cannot get out of does it increase the cost of payments
without crystallising further losses.” transformation, but it increases
He adds that a “pall” hangs over Why won’t a minimal operational risk, as these infrastructures
the securities lending market. “Some are not designed to cope with shifting
consultants have not helped by issuing approach to SEPA regulations like SEPA.
bulletins spooking many, warning them work in the long-run? Banks looking to scale should use
to immediately stop lending unless “It is an opportune time
certain conditions are met. I believe Richard Davies,
it would have been more appropriate to invest in a modern
to take a more positive view, to advise director, global infrastructure”
people to continue lending as long as
certain conditions are met.”
payments, Logica their implementation of SEPA and the
“It is not securities lending that was Despite the launch of the SEPA Credit PSD as the catalyst to revamp their
the problem, but the reinvestment of the Transfers (SCT) scheme in January payments operations, considering the
cash collateral into poor quality assets. 2008, practical implementation remains short-, mid- and long-term future. It is
If we lend UK gilts, we typically take low, with just 1.9% of the total credit an opportune time to invest in a modern
in UK gilts, safe assets [once again, this transfer volume in the euro areas being infrastructure with the capability to
writer would add, safe for the moment; SCT transactions. The European Central span regions, currencies and languages.
the failure of one gilt auction in Bank (ECB) has therefore recently called Forward-thinking banks that embrace
March - at a time when unprecedented for a migration end date for SEPA Credit SEPA as part of their long-term strategy
volumes of issue are in prospect – was Transfers and SEPA Direct Debits (SDD) should implement a single framework
brushed off the UK authorities as a to be set to ensure that the full benefits that covers both credit transfers and
technical issue, but it still registered of SEPA are realised. direct debits. Furthermore, with the
on the financial Richter scale, sending The next stage of implementation – rules around SEPA likely to evolve over
shivers down many a spine]. And as we in the form of the SEPA Direct Debits is time, it is important to have a stable
comprehensively indemnify clients, if the due to kick off in November, alongside modern payments environment that can
borrower goes bust, as Lehman Brothers the Payments Services Directive (PSD). effectively adapt with these changes.
did, we simply replace the lost assets in Banks are rapidly realising the need to There’s no question that the entire
question. In many circumstances we react and comply sooner rather than payments industry is striving to meet
actually generate better returns than later to both these initiatives. the PSD deadline. And while it’s a
agent lenders who take cash collateral, With this deadline looming, many slow-starter, SEPA uptake will increase,
i.e. it often isn’t even necessary to run banks are likely to adopt a minimal especially as large corporates become
the additional risk. People are now compliance solution in the short- more aware of the value of rationalised
realising they have to stop chasing yield term that simply ticks the boxes. euro services and pressure banks into
and focus more on risk.” And in While understandable given the time providing them. It therefore promises
the meantime, let the law suits - against constraints, this will only go so far. a significant impact on payments
custodians and global accounting firms To be in a strong position to convert revenues and can put banks in a more
– commence. n all domestic payments to SEPA competitive position. n

22

17-23 ISJ38 APR5.indd 22 6/4/09 14:51:16


Japanese Textile Stencil, 1900 — Mulberry paper with dye

The Art of Relationships


At J.P. Morgan, we invest in what’s really important—whether protecting J.P. Morgan Securities Lending
priceless works of art for future generations or building client relationships A full spectrum of global
that stand the test of time. We take our relationship with you very seriously, capabilities, including discretionary,
principal and directed lending, as
to help you achieve your business goals, enhance efficiency and mitigate risk.
well as auctions and exclusives
When you’re passionate about your business, the right relationship is essential. Financial strength
J.P. Morgan clients benefit from the expertise of our entire global franchise.
Disciplined risk management
Through this holistic approach, we harness innovative technologies and
Innovation in product development
firmwide resources to offer clients more choices, greater customization and
Access to resources and
unmatched flexibility. expertise of a leading financial
Innovation with superior results. services franchise

To find out more, log on to jpmorgan.com/securitieslending, or contact:


V
V

Western Hemisphere William Smith at 212-552-8075


Europe, Middle East and Africa Michael Fox at 44-207-742-0256
Australia/Japan Stewart Cowan at 61-2-9250-4647
Asia Andrew Cheng at 85-2-2800-1809

The products and services featured above are offered by JPMorgan Chase Bank, N.A., a subsidiary of JPMorgan Chase & Co. JPMorgan Chase Bank, N.A.,
is registered by the FSA for investment business in the United Kingdom. J.P. Morgan is a marketing name for Worldwide Securities Services businesses of
23
JPMorgan Chase & Co. and its subsidiaries worldwide. ©2009 JPMorgan Chase & Co. All rights reserved.

17-23 ISJ38 APR5.indd 23 6/4/09 14:51:19


ISJ
ISJDirectory
Directoryof
ofServices
Services ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

Asset Servicing
T: +44 (0) 208 760 7130
C: Stephen Everard or
Goal is widely-acknowledged in the financial services sector for its innovative and
Saghar Bigwood
creative solutions to highly-specialized niche processes. A: 7th Floor, 69 Park Lane,
Goal’s research has shown that in excess of USD8 billion of withholding tax remains Croydon, Surrey, CR9 1BG
unclaimed each year by the rightful owners and beneficiaries and that over USD12 E: severard@goalgroup.com or
billion is lost because rightful beneficiaries are not participating in class actions, sbigwood@goalgroup.com or
bankruptcies and disgorgements. info@goalgroup.com
W: www.goalgroup.com

Consultants|Consultancy

SMA Financial is the UK’s premier provider of SWIFT services and a long standing Simon Murby
business partner of SWIFT. SMA’s vast experience in the banking and securities Managing Director
industry has provided high quality provision of SWIFT related consultancy, training, SMA Financial Limited
system care and bureau services which is second to none. SMA prides itself on their Telephone : +44 (0)20 7940 4200
in-depth and highly experienced team of consultants chosen from the banking and Bramah House,
securities industry. The introduction of the SWIFT bureau service has witnessed much 65-71 Bermondsey Street,
success by providing cost effective and quality hosted connectivity services to many London. SE1 3XF
satisfied clients. Website: www.sma.co.uk

Custody & Clearing


BHF-BANK is one of Germany’s most prestigious private banks dating back to 1854. C: Cornelia Keth
As an advisory, service and sales & trading bank, we offer our discerning clientele a T: +49 69 718 3738
comprehensive array of customised solutions. BHF-BANK combines the strengths of a F: +49 69 718 6050
private bank with a long track record of capital market competence. Trust, an individual E: cornelia.keth@bhf-bank.com
approach and impartiality - these qualities are at the very heart of the long-term C: Moritz Ostwald
guidance and advice we provide. Our bank’s activities are grouped within the divisions T: +49 69 718 6838
Asset Management & Financial Services, Financial Markets & Corporates and Private E: moritz.ostwald@bhf-bank.com
Banking. The bank’s longstanding experience in the German securities services market
A: Strahlenbergerstraße 45,
goes hand in hand with a corporate culture that values prompt acknowledgements and
63067 Offenbach a.Main
short decision-making channels. BHF-Bank offers tailor-made custody services to meet
its clients’ particular requirements. It’s reporting services include a comprehensive Germany
SWIFT reporting matrix as well as its Internet-based reporting tool cds@web. W: www.bhf-bank.com
Assets under Custody: EUR309 bn No of funds: 409

DnB NOR is the leading provider of Custody, Clearing and Remote Member Service in T: +47 22 94 92 95
Norway. DnB NOR offers a full range of securities settlement, Corporate Action and cash F: +47 22 48 28 46
management services for both foreign and domestic institutional clients. The bank Contact: Bente I. Hoem, Head of Global
has a strong commitment to the Custody business in Norway and the staff is highly Relations & Network
knowledgeable and experienced. In addition, DnB NOR provides a wide range of value- E: bente.hoem@dnbnor.no
added services for foreign clients such as Securities Lending, Income Collection, Proxy W:www.dnbnor.com
Voting, Tax Reclaim, and MIS reporting.
As the largest commercial bank in Norway, DnB NOR offers clients full services in
securities trading, registration, foreign exchange and Money Market.

Banking Securities Services provides award winning local and regional custody services For further information please contact
for investment professionals. We are proud to be the largest custodian provider in Lilla Juranyi, Global Head Custody
terms of assets and number of foreign clients in Central & Eastern Europe. ING has been at + 31 20 7979 435
providing Securities Services in CEE since 1994 and we will continue our ongoing pursuit or contact her by email:
of excellence through new technology. Innovation and client focus are the key drivers Lilla.Juranyi@mail.ing.nl
to service our clients the best way.
Other activities of ING Wholesale Banking Securities Services are Paying Agency Services
and web-based management of employee stock option & share plans.
ING is your local partner in: Belgium, Bulgaria, Czech Republic, Hungary, Poland,
Romania, Russia, Slovak Republic and Ukraine.

Intesa Sanpaolo’s Transaction Services include : Piazza della Scala 6


• Sub Custody, Derivatives and Remote Membership Clearing
20121 Milan, Italy
• Global Custody and Depository Bank for mutual funds, pension funds, real
T: +39 02 8794 2466
estate funds, private equity funds and hedge funds
• Fund Administration for mutual funds, pension funds, real estate funds, F: +39 02 8794 1519
private equity funds and hedge funds W: intesasanpaolo.com
• Paying Agent for foreign funds and sicavs C: Riccardo Lamanna
• Cash and Payment services like swift to checks, mass payments, checks and E: riccardo.lamanna@
cash letters intesasanpaolo.com

24

24-32 ISJ38 APR5.indd 24 6/4/09 13:44:48


ISJ Investor
ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services
Nordea is the leading financial services group in the Nordic and Baltic region and operates
through three business areas: Nordic Banking, Private Banking and Institutional &
International Banking. Nordea is the leading custody services provider in the region. Nordea
provides high quality, tailor-made custody services for local and foreign investors dealing with Contact:
Nordic and Baltic securities. Due to the unique history of being formed from four established Nina Groth
banks, Nordea is the only Nordic custody provider with strong local presence and expertise in all Head of Sub-custody and Clearing
four markets. Nordea combines Nordic competence with local expertise, and has proven ability Tel: +45 3333 6124
to deliver high quality services that meet both clients’ and each local market’s requirements. E-mail: nina.groth@nordea.com
Leading Nordic custodian: Critical mass and resources available; deep local experience and
active involvement in each Nordic market; Complete operational capabilities and best-fit
systems developed in each Nordic market; Proven ability to deliver high-quality service in all
Nordic markets; Excellent connection with key players in all Nordic Markets; Extensive product
and service offering; Your single point of entry to the whole Nordic region.

www.rbcdexia.com
RBC Dexia Investor Services offers a complete range of investor services to institutions T: +44 (0) 20 7653 4096
worldwide. Our unique offshore and onshore solutions, combined with the expertise F: +44 (0) 20 7248 3946
of our 5,500 professionals in 16 markets, help clients grow their business and sustain Contact: Antony Johnson
enhanced performance through efficiency improvements and robust risk management Head, Sales & Relationship Management
processes. Equally-own by RBC and Dexia, the company ranks among the world’s top 10 E: antony.johnson@rbcdexia.com
global custodians with USD 1.9 trillion in client assets under administration. Address: 71 Queen Victoria Street,
London, EC4V 4DE, UK

Santander is Spain’s leading financial institution and the largest bank in the euro zone
by market capitalization. Our commitment and contribution to the securities industry is
T: Europe: (34) 91 2893932 / 28
well established after more than a century of providing services in this field.
T: USA: (1212) 350 39 02
Santander’s cutting edge technology enables it to offer a comprehensive array of
W: santanderglobal.com
innovative services in a broad range of markets. Santander currently has full local
E: globalsecurities@
capabilities in Iberian and Latin American markets along with a franchised presence in
gruposantander.com
many others. Santander`s experience and product range ensures that every aspect of
the securities business is fully contemplated.

Financial Asset Services is the custody and investments-servicing division of Standard


Bank, providing a unique suite of services to sophisticated investors in South Africa and A:Standard Bank
eight sub-Saharan markets. Financial Asset Services
3rd Floor
Standard Bank has assets under custody to the value of ZAR1.56 trillion and an overall 25 Sauer Street
market share of approximately 40%. Johannesburg 2107
T: +2711 636 6615
Standard Bank’s unique selling point lies in its consultative approach to E: adam.bateman@standardbank.co.za
relationships combined with the bank’s commitment to custody and investment W: www.standardbank.co.za
administration services.

SEB is the leading provider of securities services in the Nordic and Baltic area. We
are committed to custody and clearing processes for the wholesale market. We hold
T: +46 8 763 53 04
securities worth over 560 bn EUR and provide services in more that 75 markets, 10 of
F: +46 8 763 69 30
them under the SEB name (Sweden, Norway, Finland, Denmark, Luxembourg, Germany,
C: Goran Fors, Global Head
Estonia, Latvia, Lithuania and Ukraine).
of Custody Services
We offer a full range of securities services including corporate action and information
E: goran.fors@seb.se
services, securities lending and services to remote members of the Nordic and Baltic
W: www.seb.se
stock exchanges. We continuously develop new products in connection with clients and
partners to ensure we deliver the high-quality products our clients demand. We always
strive to make the processes more efficient. With a history of over 150 years in the
securities industry; we know the market and our clients well.

Société Générale Securities Services offers institutional investors, asset managers and Sébastien Danloy
financial intermediaries a comprehensive range of financial securities services: custody, Global Head of Sales,
clearing & trustee services, fund administration, asset servicing and transfer agency. Investor Services
SGSS currently ranks 3rd European custodian and 9th worldwide custodian (Source: Société Générale Securities Services
Globalcustody.net) with EUR 2,580* billion in assets held and valuates 4,354* funds T: +33 (0)1 41 42 98 65
representing assets of EUR 405* billion (as of June 2007). E: sebastien.danloy@socgen.com
W: www.sg-securities-services.com

25

24-32 ISJ38 APR5.indd 25 6/4/09 13:44:49


ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

Standard Chartered leading the way in Asia, Africa and the Middle East. Standard
C: Neil Daswani,
Chartered has a history of over 150 years in banking and is in many of the world’s fastest-
Global Head, Securities Services
growing markets with an extensive global network of over 1,200 branches (including
T: +65 6517 0022
subsidiaries, associates and joint ventures) in over 50 countries in the Asia Pacific Region,
E:
South Asia, the Middle East, Africa, the United Kingdom and the Americas. As one of
Neil.Daswani@sg.
Asia’s leading custodians, Standard Chartered has an impressive track record across the
standardchartered.com
16 Asian markets in which it provides securities services. It serves global, regional and
W: www.standardchartered.com
local custodians and broker-dealers, as well as local and regional fund managers. The
Bank plays a key role in promoting the development of these markets and keeping the
international investor community informed of industry developments across the region.

Swedbank provides client-focused custody services to domestic and international


securities lending (including auto-borrow facilities), derivative clearing services, proxy
voting, full corporate actions and income service. Flexibility is an important aspect of
Swedbanks products and services. Our dedicated Client Relations Managers and Account T: +46 8 5859 1800
Managers are focused on personalized processing and reporting solutions. F: +46 8 7237 147
Other Features: C: Neal Meacham, Head of Custody
• ISO9001:2000 quality certification. E: neal.meacham@swedbank.com
• Swedbank Markets Online (SMO) internet information and reporting tool for A: Stockholm SE 105 34 Sweden
Custody and Securities Lending.
• Nordic Custody alliance with DnB NOR (Norway), OKO Bank (Finland) and
Amagerbanken (Denmark) to offer regional custody product.
Institutional Assets under Custody: USD 70 billion

Data Services
Market Data & Analytics provides high-value real-time market data, indices and back Avox
office services. Information from diverse sources are provided to its customers, tailored Redwither Tower
to their specific information needs. Accuracy and reliability are ensured by collecting Redwither Business Park
the data from the Group’s own trading platforms, such as Xetra® and Eurex® and Wrexham, LL13 9XT
cooperation partners like STOXX Ltd. and the Irish Stock Exchange. Avox®, a majority- United Kingdom
owned subsidiary, validates, corrects, enriches and maintains
business entity data. With an operational model, unique in the industry, Avox® enables T: +44 (1978) 661 813
clients to comply with regulatory requirements and to achieve a holistic view of the risk F: +44 (1978) 661 668
exposure towards a client. W: www.avox.info

Interactive Data Corporation (NYSE: IDC) is a leading global provider of financial market www.interactivedata.com
data, analytics and related services to financial institutions, active traders and individual T: 020 7825 7800
investors. The Company’s businesses supply real-time market data, time-sensitive F: 020 7608 3514
pricing, evaluations and reference data for millions of securities traded around the Brendan Beith
world, including hard-to-value instruments. Many of the world’s best-known financial European Sales Director
service and software companies subscribe to the Company’s services in support of their eu-info@interactivedata.com
trading, analysis, portfolio management and valuation activities. Through its businesses, Fitzroy House
Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, 13-17 Epworth Street
Interactive Data Fixed Income Analytics, and eSignal, the Company has approximately London EC2A 4DL UK
2,300 employees in offices located throughout North America, Europe, Asia and
Australia.

SmartCo is a leading provider of data management solutions for the financial industry. For further information: www.smartco.fr
SmartCo’s software, Smart Financial Data Hub, covers all the data area, including or info@smartco.fr
financial instruments, market data, third parties, funds, transactions, and provides full
connectivity, a powerful and user friendly front-end, traceability, quality control, data SmartCo
enrichment and customisable workflow. 37 rue de Liège
Our solutions are based on SmartPlanet, an innovative technology focused on data 75008 Paris
management, and able to meet evolving business requirements. France
SmartCo offers to its customers the ability to respond in the fastest way to regulatory and T: + 33 1 58 22 29 60
business changes. E: info@smartco.fr
W: www.smartco.fr

Fund Administration
For more information visit our website:
Established in 2002, IMFC Fund Services B.V. is a boutique hedge fund administrator www.imfcfundservices.com
and a trustee with its offices in Amsterdam and Sydney. IMFC offers third parties
administration and related services to all type of onshore and offshore funds combining www.imfcfundservices.com
high quality, independency, technology, timely calculation with flexibility, experience, t +31.20.644.4558
f +31.20.644.2735
custom-made solutions and competitive rates. Our services include: fund set-up and
Mrs. Consuelo Nardon
corporate services, NAV calculation and other accounting services, R&T agent and other
e: consuelo.nardon@imfc.nl
investors and compliance services.
Rivierstaete Building, Amsteldijk 166,
1079 LH Amsterdam, Netherlands

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ISJ Investor
ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services
C: William J. Salus
A: PNC Global Investment Servicing,
301 Bellevue Parkway
Wilmington, DE 19809 USA
As one of the world’s leading third-party fund administrators, PNC Global Investment T: 302.791.2000
Servicing has over 35 years of experience delivering personalised solutions to asset E: information@pncgis.com
managers, distributors, and financial advisors worldwide. PNC services an international C: Fergus McKeon
client base from service centres in the United States, Luxembourg, Ireland and Poland, A: PNC Global Investment Servicing
additional offices in London and New York, and a presence in the Cayman Islands. Riverside Two
Sir John Rogerson’s Quay, Dublin 2,
Ireland
T: +353-1-790-3500
E: information@pncgis.com

Société Générale Securities Services offers institutional investors, asset


managers and financial intermediaries a comprehensive range of financial securities Sébastien Danloy
services: Clearing, Liquidity Management, Custody and Trustee, Fund Administration, Global Head of Sales
Asset Servicing, Fund Distribution Services and Issuer Services. SGSS currently ranks 3rd Société Générale Securities Services
European custodian and 7th worldwide T: +33 (0)1 41 42 98 65
custodian (Source: Globalcustody.net) with EUR 2,731* billion in assets held and valuates E: sebastien.danloy@socgen.com
5,158* funds representing assets of EUR 499* billion (at end March 2008). W: www.sg-securities-services.com

Swiss Financial Services


Drawing upon an extensive track record of proficiency, dependability and (Ireland) Ltd.
responsiveness, Swiss Financial Services acts as administrator as well as registrar and Block 4B,Cleaboy Business Park,
transfer agent of funds investing in a broad range of financial instruments. These Old Kilmeaden Road,
include futures, foreign exchange, equities, options, bonds and other funds. Waterford, Ireland
T: +353 51 351180
We perform accounting and administration services for diverse fund types domiciled F: +353 51 871595
in, but not limited to, the United States, Bahamas, Cayman Islands, B.V.I. and Ireland.
Adrian Maher
E: amaher@swiss-financial.ie

Luxembourg: Jean-Paul Gennari,


tel. +352-44-1010 1
Fund Services is a dedicated fund administrator providing customized and flexible services for Switzerland: Markus Steiner,
traditional and alternative investments. tel. +41-61-288 4910
Our comprehensive range of services for investment funds includes fund set-up, registration and W: www.ubs.com/fundservices
support around the world, fund accounting, NAV calculation, risk control and reporting. We have C: Andre Valente
practical experience with registering funds in 28 jurisdictions. T: + 41 61 288 6269
We provide a flexible offering from the full range of services, including Private Labelling, to selected E: andre.valente@ubs.com
functions. Through our leading fund administration architecture, multi-source pricing and powerful A:UBS Global Asset Management -
compliance tools, we offer a tailored, cost effective service. www.ubs.com/fundservices Fund Services, Brunngässlein 12,
PO Box CH-4002 Basel, Switzerland

Hedge Fund Administration


Apex Fund Services Ltd is a global hedge fund administration solution for hedge funds C: Peter Hughes
and private equity clients located in 12 separate jurisdictions across the globe. The Group Managing Director
company uses the software solution, PFS PAXUS, which is a fully integrated hedge fund T: +1 441-292-2739
accounting system combined with web-based reporting to allow clients and investors F:+1 441-292-1884
to access their information 24/7 securely online. We will tailor all solutions to meet E: peter@apex.bm
your needs and our continuing focus on the quality of service and the relationship with John Bohan
each and individual client ensures that we retain our ethos of providing a personalized Group Manager of Operations
service rather than a generic solution. T: +353 21 4633366
Highly qualified and experienced staff, mirrored with top tier technology and F: +353 21 4633377
competitive fee structures make Apex Fund Services Ltd the clear choice for your fund E: John@apexfunds.ie
administration needs.

Custom House Administration &


Custom House, which is one of the world’s largest independent alternative investment and
Corporate Services Limited
hedge fund administrators, was awarded a SAS 70 Type I in May 2007 and a SAS 70 Type II in
A: 25 Eden Quay, Dublin 1, Ireland
December 2007.
T: +(353) 1 878 0807
Custom House offers a round-the-world, round-the-clock service from its office in Dublin and F: +(353) 1 878 0827
representative offices in Chicago and Singapore, enabling it to provide, not only complete C: dermot.butler@
global administration services, but also the ability to produce daily dealing NAVs. customhousegroup.com
Custom House is authorised by the Irish Financial Regulator under Section 10 of the C: david.blair@
Investment Intermediaries Act, 1995, which authorisation does not extend to the Chicago customhousegroup.com
and Singapore representative offices. www.customhousegroup.com

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ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal
Cayman Islands: Darren Stainrod,
Fund Services holds a leading position in the area of hedge fund administration tel. +1-345-914 1076
with specialized teams around the world. We offer a complete range of services Eire: Don McClean, T: +353-1-436 3636
including accounting, NAV calculation, shareholder services, banking and credit US: Concetta Mastrangelo,
facilities. tel. +1-212-882 5523
With specialist expertise in both single manager and fund of hedge fund Hong Kong: Michelle Chua,
administration, services can be provided for both onshore and offshore funds. tel. +852-3712 2387
W: www.ubs.com/fundservices
Through our comprehensive range of services and products, leading edge
C: Darren Stainrod, T: ++1-345-914 1076
technology platforms and superior client service, we work in partnership to offer E: Darren.stainrod@ubs.com
the solutions you need. A: UBS Fund Services (Cayman) Ltd, PO
Box 852 GT, Grand Cayman, Cayman Is

International Finance Centres


The British Virgin Islands has created a progressive and transparent environment for the
establishment and regulation of mutual/hedge funds and their functionaries. By the end British Virgin Islands
of Q3 2006 the BVI had recognised or registered more than 4,000 funds, and licensed International Finance Centre
some 700 managers and administrators, making the BVI a leading domicile of choice for Haycraft Building
investment business. Benefits of conducting investment business in the BVI include: 1 Pasea Estate
• Fast-track registration and licensing system - funds can be registered in a few days. Road Town
• Presence of qualified, experienced legal, accounting & administration practitioners. Tortola
• A well-developed corporate professional infrastructure. British Virgin Islands
• Modern, robust and cost-effective regulatory and corporate regimes. T: +1 284 494 1509
• BVI private and professional funds fall outside the scope of EU Savings taxation Directive. F: +1 284 494 1260
• Segregated Portfolio Companies - also known as Protected Cell Companies - can now be W: www.bviifc.gov.vg
formed as mutual funds under the BVI Business Companies Act 2004.

Payments & Settlements


VocaLink is the payment transaction specialist. Trusted by the world’s top banks VocaLink
our automated payment system processes over 90 million transactions per day. The Drake House
VocaLink switching platform powers the world’s busiest ATM network and provides Homestead Road
end-to-end management of Europe’s largest ATM estate, while the Real-Time Rickmansworth
Payments platform provides the central infrastructure for the UK Faster Payments Hertfordshire
service. The VocaLink EuroCSM delivers reach for our clients throughout the SEPA WD3 1FX
and beyond with a range of value-added services that leverage our know-how and
technical capabilities. VocaLink is the partner of choice internationally, working T: +44(0)870 1650019
with BGC to process Sweden’s automated payments. F: info@vocalink.com
Find out how we can help your business at www.vocalink.com W: www.vocalink.com

Prime Brokerage
Newedge Global Prime Brokerage Group is a global, multi-disciplinary, solution-
providing team dedicated to delivering superior services to alternative investment Philippe Teilhard de Chardin,
industry participants including hedge funds, commodity trading advisors (CTAs), Global Head of Prime Brokerage
fund of hedge funds, family offices, and institutional investors (insurance companies, T +44 20 7676 8536
banks and pension funds). The Newedge prime brokerage team offers a global range Vincent Tournant, Head of Business
of brokerage services covering a wide range of asset classes including equities, Development T +44 20 7676 8171
bonds, currencies, commodities, and their related listed and OTC derivative products. Duncan Crawford, Head of Capital
We also offer an innovative portfolio-based cross-margining solution, a dedicated Introductions T +44 20 7676 8504
account management desk, hedge fund start up services, quantitative information on E: pbinfo@newedgegroup.com
the hedge fund industry, capital introductions services, and recently prime brokerage www.newedgegroup.com/primebrokerage
services to Sharia compliant hedge funds. Newedge is wholly owned by Calyon and
Société Générale, with both companies having 50% ownership.

Securities Lending
Data Explorers (www.dataexplorers.com), based in New York and London, is the UK: 2 Seething Lane, London, EC3N 4AT
world’s most complete resource for data, analysis and insight into securities T +44 (0) 20 7264 7600,
lending and short selling. The company’s proprietary data gives an unrivalled, F +44 (0)20 7392 4004
comprehensive view on share lending and short-selling activity. With data sourced US: 75 Rockefeller Plaza, 19th Floor
directly from securities lending desks of over 100 of the top lending firms and New York, 10019, USA
representing most of the global securities lending market, Data Explorers has built T +1 212 710 2210 F + 1 212 710 2212
a reputation with leading financial institutions as the source for short intelligence Julian Pittam T +44 (0) 207 264 7616
that informs their decision-making and their coverage of market sectors and E:julian.pittam@dataexplorers.com
companies. Please visit our Blog: dataexplorers.com/news, Twitter, twitter.com/ New York: Ken Read T +212 710 2210
dataexplorers, Video dataexplorers.com/daily-briefing and LinkedIn linkedin. E: kenneth.read@dataexplorers.com
www.dataexplorers.com
com/companies/data-explorers sites.
www.equilend.com
EquiLend is a leading provider of trading services for the securities finance EquiLend Europe Ltd.
industry. EquiLend facilitates straight-through processing by using a common 14 Devonshire Square
standards-based protocol and infrastructure, which automates formerly manual London, EC2M 4TE
trading processes. Used by borrowers and lenders throughout the world, the +44 (0) 207 426 4426
T: UK- +44 (0)20 7743 9510
EquiLend platform allows for greater efficiency and enables firms to scale their C: Michelle Lindenberger
business globally. Using EquiLend’s complete end-to-end services, including pre- E: michelle.lindenberger@equilend.com
and post-trade, reduces the risk of potential errors. The platform eliminates the A: 17 State Street, 9th Floor
need to maintain costly point-to-point connections while allowing firms to drive New York, NY, 10004
T: US- +1 212 901 2224
down unit costs, allowing firms to expand business, move into different markets, C: Michelle Lindenberger
increase trading volumes, all without additional spend. This makes the EquiLend E: michelle.lindenberger@equilend.com
platform a cost-efficient choice for all institutions, regardless of size. W: www.equilend.com

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ISJ Investor
ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services
eSecLending is a full service securities lending agent and administrator of
customized securities lending programs. Their program has been adopted by many of
the world’s largest and most sophisticated asset gatherers including pension funds, T: US- +1 617 204 4500
mutual funds, investment managers and insurance companies. They are a third party T: UK- +44 (0)20 7469 6000
industry specialist providing lenders with customized programs, high touch client C: Christopher Jaynes
service, comprehensive risk management, and superior risk adjusted returns. The E: info@eseclending.com
firm takes a highly consultative approach with their clients by structuring separate, W: www.eseclending.com
non-pooled programs and utilizing a competitive auction to determine the optimal A: 175 Federal Street, 11th FL, Boston, MA
route to market for their clients’ lendable assets. Having built their business to 02110, US
incorporate investment practices such as the use of specialists, multiple-managers,
unbundling, price transparency, and competition, their approach ensures best A: 1st Floor, 10 King William Street,
execution and also provides clients with greater control over their programs, allowing London EC4N 7TW, UK
them to more effectively monitor and mitigate risks and counterparty relationships.

Eurex is one of the largest derivatives exchanges and the leading clearing house
in Europe. Wherever you are located, we provide you with access to the benchmark
futures and options market for European derivatives. Eurex also offers short term
W: www.eurexseclend.com
funding products, such as Eurex Repo. Eurex Repo is among the forerunners in
T: +41 58 854 2066
providing integrated trading and clearing for repo transactions. Eurex’s latest F: +41 58 854 2455
innovative marketplace is called Eurex SecLend. E: info@eurexseclend.com
Eurex SecLend. Europe’s leading investment banks participate as borrowers Eurex Zurich Ltd., Selnaustrasse
in the Eurex SecLend marketplace, acting as principal brokers, dealers and 30, 8021 Zurich, Switzerland
intermediaries. They all benefit from Eurex’s leading state-of-the-art trading and
processing services. For Eurex, service and technology innovation is not just a
buzzword. New trends are being transformed into inventions through the adoption
of advanced trading practices. Find out more on www.eurexseclend.com.

FINACE® is the only fully integrated solution today which supports the future T: +41 (0)44 298 92 00
business model within the area of Securities Finance and Collateral Management. F: +41 (0)44 298 93 00
The architecture of FINACE® is based on a stable, leading edge technology A: COMIT AG, Pflanzschulstrasse 7,
platform, which was developed with performance and robustness as the focus of CH-8004 Zürich, Switzerland
design. With flexibility at its core, customer-driven extensions and modifications W: www.finacesolution.com
can be quickly and easily applied to the standard component set. www.comit.ch

JPMorgan’s Securities Lending program is unparalleled due in no small part to New York: William Smith
T: 212-623-5664
the Firm’s breadth of capability, financial strength, professional expertise and
E: william.z.smith@jpmorgan.com
seamless operations. Our program enables investors to access a broad spectrum of
London: Michael Fox
lending markets, with a diverse borrower base, offering a broad indemnification T: 44 207 742 0256
against borrower default, while achieving very competitive bids for their E: michael.uk.fox@jpmorgan.com
securities - all of this in an environment designed not to compromise the activities Sydney: David Brown
of their fund managers. As one of the founding members of EquiLend, a global T: (61-2)92504606
automated platform for borrowers and lenders, JPMorgan is at the forefront E: david.ldn.brown@jpmorgan.com
of technology and is ideally placed given its integrated lending, custody and W: www.jpmorgan.com/wss
accounting platforms.

Santander is the only Spanish financial institution with a team exclusively


dedicated to securities finance & with the purchase of Abbey in 2004 has W: www.gruposantander.com
expanded its capacity on a Global basis with trading teams in London (UK) & T: (3491) 289 39 42/54
Connecticut (USA). E: securitieslending@
gruposantander.com
Santander’s leading local capabilities in Spain, Portugal, UK, USA & Latin
America, along with its solid balance sheet & combined with the state-of-the-art
technology, provides its clients with the broadest range of solutions in securities
lending & financing, including availability across all assets classes, as well as
access to uncommon emerging markets.

Around the world, securities financing is managed on SunGard’s Email: securities.finance@


proven solutions for international and U.S. domestic securities lending and sungard.com
repo for over 250 clients. Through our Loanet, Global One, Martini and Astec Contact:
Analytics products and services, we provide comprehensive business solutions EMEA: +44 (0) 20 8081 2779
and information with worldwide reach for equities or fixed income securities America’s: +1 (646) 445-1179
financing. These solutions – all in an integrated, exception-based processing Asia Pacific: + 62276400
architecture – includes order routing, pre-trade analytics, trading, position Visit: www.sungard.com/
management, operations, accounting, settlement and reconciliation. securitiesfinance

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ISJ Directory
Technologyof Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

BI-SAM is a leading provider of analytics software, client reporting and data


management solutions to the investment management community.
Our integrated and innovative solutions have already been adopted by many A: BI-SAM Ltd
renowned asset managers in France, Belgium, Luxembourg, UK, Hong Kong and 1 Cornhill
Singapore who have assets under management ranging from 10 to 450 billion Euros. London EC3V 3ND
The B-One suite of products covers: performance measurement, performance T: +44 (0)20 3008 5834
attribution (equities, balanced and fixed income), risk attribution (ex-post and ex- F: + 44 (0)20 3008 5831
ante), as well as multi-lingual client reporting and factsheets. This suite of products E: marketing@bi-sam.com
can be used either as stand-alone applications or ASP hosted solutions. W: www.bi-sam.com
The Company has approximately 45 employees in offices located in Europe (Paris,
London, Luxembourg). Offices in Asia and North America are under consideration.
The Company is headquartered in Paris.

DST International is the world’s premier vendor of technology solutions to the global investment T: UK +44 (0)20 8390 5000
management community with over 700 clients in 55 countries, and 1500 employees in 19 of the Boston +1 617 482 8800
world’s leading financial centres. Our wide range of asset management solutions meet the needs of Hong Kong +85 225 812 880
fund managers, dealers, settlement staff, custodians and record keepers operating as international F: +44 (0)20 8390 7000
asset managers; from front office simulation, opinion management and modelling functions, E: info@dstintl.com
through data management, dealing and settlement to custody and corporate actions. The suite of A: DST House, St Mark’s Hill, Surbiton,
products can be used either as stand-alone applications or brought together in flexible combinations Surrey, KT6 4QD
according to specific needs. W: www.dstinternational.com

Eagle Investment Systems LLC is a global provider of financial services technology,


serving the world’s leading financial institutions. Eagle’s Web-based systems support W: www.eagleinvsys.com
the complex requirements of firms of any size including institutional investment T: +44 (0) 20 7163 5700
managers, mutual funds, hedge funds, brokers, public funds, plan sponsors, and F: +44 (0) 20 7163 5701
insurance companies. Eagle is committed to providing enterprise-wide, leading-edge A: The Bank of New York Mellon
technology and professional services for investment accounting, data management, and Financial Centre
performance measurement. Eagle’s product suite is offered as an installed application or 160 Queen Victoria Street
can be hosted via Eagle ACCESS, Eagle’s application service provider. Eagle Investment London EC4V 4LA
Systems LLC is a division of The Bank of New York Mellon Corporation. To learn more
about Eagle’s solutions, contact sales@eagleinvsys.com or visit www.eagleinvsys.com.

Financial Tradeware provides integrated solutions for medium to small sized Investment
Management firms, Fund Managers and Hedge Funds, covering the full trade life cycle. W: www.f-tradeware.com
It is part of the Dharma Group of companies and benefits from the joint contributions T: +44 (0)20 7493 2773
and experiences within the group of market traders, business analysts, financial services F: +44 (0)20 7495 4858
professionals and skilled Microsoft Certified programmers. The company has developed a C: GrahamBright
suite of applications that integrate and Straight Through Process (STP) real-time trading, E: info@f-tradeware.com
back office administration, accounting and compliance. Ultra.net®, S-Messenger® and A: 31 Dover Street
H-Fund® arwe the company’s flagship products all based on Microsoft.NET infrastructure. London W1S 4ND UK
The company also offers a Member Concentrator for hosted SWIFT connectivity and Member
Administered Closed User Group (MA-CUG) services for Corporates and Hedge funds.

Isis Financial Systems provides mission critical investment management software and
services to many large and small companies. Our customers perform a broad range of
functions including fund accounting, derivative and hedge funds, wealth management, Contact:
and pension and endowments, etc…. Our integrated solution services the front, middle, Isis Financial Systems
and back offices of these companies with software that accommodates most any security 14 Felton Street
type. Built on a contemporary three tiered architecture our application helps financial Waltham, MA 02453
companies improve operating efficiencies, increase accuracy and reliability and improve Sales@IsisFS.com
customer service. (00-1) 781-209-0262
IsisFS has the experience and IMS has the tools to improve your operations and save you
money.

GL TRADE is your global financial software solutions company, operating in over 50


countries and serving 1,600 clients. We are the leading provider of multi asset front to www.gltrade.com
back solutions, connectivity and information services. We deliver trading solutions that
ensure our clients success on securities, listed derivatives, commodities, fixed income GL TRADE
and foreign exchange. Cheapside House
Dedicated to post trade securities operations, GL RIMS is your comprehensive real time 134-147 Cheapside
securities post execution processing solution, covering middle office, settlement and EC2V 6BJ London UK
accounting requirements. Its wide use of automation enables global capital markets Tel: +44 207 665 6200
organisation to achieve maximum STP. It is a flexible, highly scalable and easy to install Email: marketing@gltrade.com
platform with a new Service Oriented Architecture feature that allows smooth and
efficient connections with other third parties within a company.

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ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services

A:IGEFI Group Sàrl - 7, Rue des


IGEFI is the foremost provider of software solutions for international fund promoters, Primeurs,
third-party service providers and fund managers. Its prestigious client-base is testimony L-2361 Strassen
to our commitment, service and quality with more than 200 expert staff supporting T: +352 26 44 211
clients from seven offices worldwide including Bangalore, Boston, Frankfurt, Geneva, F: +352 26 44 21 44
London, Luxembourg and Paris. MultiFonds is operational in more than 20 countries E: marketing@igefi.com
worldwide and support investment funds assets in excess of US$ 2 trillion. MultiFonds W: www.igefi.com
Fund Accounting and MultiFonds Transfer Agency are developed on a “one system-one C: Mr. Jesper Steiness - Head of
database” philosophy and provide significant advantages including reduced overhead Business Development
and IT support costs and single look and feel reporting for global clients. Europe & Asia
E: jesper.steiness@igefi.com

For more information on Information


Mosaic, please visit our website at
Information Mosaic is a global provider of advanced custody, corporate actions and wealth www.informationmosaic.com
Global:
management solutions to the global securities industry. Information Mosaic’s business
emullan@informationmosaic.com,
professionals leverage decades of financial industry expertise and technical knowledge
US:
to deliver complex projects on time and within budget. Since inception, the company emadigan@informationmosaic.com
has utilized the most modern technology to develop solutions to run on a scalable, Europe:
single platform. Today, Information Mosaic supports clients from offices in Boston, aleyder@informationmosaic.com
Dublin, London, Luxembourg, New York and Singapore. Currently, six of the top 10 global Asia:
custodians deploy Information Mosaic solutions worldwide. djennings@informationmosaic.com
General Enquires:
jflett@informationmosaic.com

For more than a decade, administrators, managers, and advisors have relied
on KOGER for dependable software tools backed by extensive industry T: 001-201-291-7747
experience and expertise. Now, for those who want to reduce costs and streamline F: 001-201-291-7808
business processes, Koger offers Fully Integrated Fund C: Mr Ras Sipko
Administrator, a vertically integrated suite serving the back-office software needs of the E: ras@kogerusa.com
fund industry. KOGER USA
Fully Integrated Fund Administrator consists of three core programs: 12 Route 17 North
~ NTAS, the New Transfer-agency System Suite 111
~ E*TAS, Electronic Transfer Agency System Paramus
New Jersey, NJ 07652, USA
~ GRID, Global Reach Interface Daemon
W: www.kogerusa.com
Other programs, such as PTAS, KIT, and KORS available separately, complement the core
competency of Fully Integrated Fund Administrator.

Misys provides integrated, comprehensive solutions that deliver significant results to


over 1,200 financial institutions globally. Our buyside solutions help asset servicers,
asset managers and hedge funds handle the latest complex products, streamline
processes, reduce costs and improve STP. Misys Summit is our award winning, www.misys.com
multi-asset class solution that boasts 18 years OTC derivatives market expertise. tcm.marketing@misys.com
With extensive OTC buyside coverage and the market leading structured products
module, Misys Summit delivers the solution you need for handling the end to end
process for OTC. We also provide a customisable ASP service for fast implementation
and lower costs.

Building on over twenty years of experience in capital markets and cross-asset software
solutions, Murex introduces Mx Asset Manager - a unique cross currency, cross asset fund
management solution capable of handling the full range of products, from plain vanilla to C: Hélène Desbiez
the most complex derivative products. Business Development Manager
Coupled with a high degree of flexibility and customization, Mx Asset Manager T: +33 1 44 05 32 00
features a multifaceted design catering to the needs of both service providers E: helene.desbiez@murex.com
(prime brokers, administrators, asset servicing providers) and direct clients (portfolio W: www.murex.com
managers for mutual, pension or hedge funds, insurance companies).
With so many new challenges presented to buy-side managers when integrating
increasingly-complex derivatives into their portfolios and funds, Mx Asset Manager
represents a strong and reliable ally for dynamic position keeping and multi-dimensional
risk management in a thriving market.

Odyssey Financial Technologies is an industry leader in the global provision of wealth


and asset management solutions and services to the Private Banking, Mass Affluent and
London Office:
Retail Banks as well as Institutional and Fund Managers. Over 200 financial institutions Martin House
in more than 30 countries have chosen Odyssey solutions. Odyssey focuses on providing 5 Martin Lane
a comprehensive range of components for portfolio management (PMS), advisory London EC4R 0DP U.K.
process, customer relationship (CRM), compliance, risk, analytics and Enterprise Data
Management (EDM). The components are deployed on a single scalable wealth and asset T: +44 (0)20 7621 5800
management platform, facilitating the enterprise-wide implementation of solutions F: +44 (0)20 7621 5899
and data management. Founded in Luxembourg in 1995, Odyssey today has offices in
the key financial centers, including London, New York, Singapore, Zurich, Frankfurt, E: info@odyssey-group.com
Brussels, Geneva, Madrid, Toronto and Tokyo. Odyssey’s operational head office and main W: www.odyssey-group.com
development centre is located in Lausanne, Switzerland. Throughout this knowledgeable
network Odyssey employs over 600 professionals.

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ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

peterevans is a leading provider of front to back office solutions for the financial services
sector. With 23 years experience peterevans takes a sophisticated and dynamic approach
to assist customers in reducing costs and witnessing an increase in margins by seamlessly peterevans
replacing costly and restricting legacy platforms. peterevans works in a collaborative New Broad Street House
manner and sees clients as partners to help meet all the demands in today’s marketplace. 35 New Broad Street
The xanite product suite offers a highly configurable, flexible and fully integrated, browser London EC2M 1NH
T: +44 (0) 29 20 402200
based, comprehensive front to back solution that complies with message standardization
E: info@peterevans.com
and settlement harmonization. Deployed as a single application or integrated as W: www.peterevans.com
components into your existing platform. Each of the xanite modules can be delivered via an
ASP or self-hosted. Covering: wealth management, custody corporate actions clearing and
settlement private client and on-line stock broking.

Pirum provides a full suite of automated reconciliation and straight through processing
(STP) services supporting Operations within the global securities finance industry. The
company’s on-line SBLREX service encompasses daily contract T: +44 20 7220 0961
compare, monthly billing comparison, mark-to-market & exposure processing, pending F: +44 20 7220 0977
trade comparison, income claims processing and C: Rupert Perry
custody reconciliation. E: rupert.perry@pirum.com
Subscribers to Pirum’s services significantly increase their operational efficiency and A: Pirum Systems Limited
reduce their risk by using Pirum’s solutions, as staff are able to focus on fixing the 37-39 Lime Street
exceptions instead of using their time to check and process routine business. These London, EC3M 7AY
automated processes are more scalable and risk controlled too, allowing W: www.pirum.com
significantly higher volumes to be managed without corresponding increases in
operations headcount.

Princeton Financial Systems (PFS), a 100% subsidiary of State Street Corporation, is a leading
provider of portfolio management and accounting systems, investment compliance, data For more information, visit Princeton
management, and reporting solutions to the global investment industry. Our solutions are
used worldwide by over 430 leading investment managers, custodians, insurance companies, Financial’s website at www.pfs.com or
pension funds, hedge funds, and banks, which manage combined total assets of over $5 www.pfs.aquin.com.
trillion in more than 40 countries.These include ABP, AEGON, AIG, Allianz Global Investors, T: +1 609-987-2400
BNP Paribas, CaIPERS, CACEIS Investor Services, Citi, Commerzbank, Credit Suisse, HSBC F: +1 609-987-9320
Insurance, Metropolitan Life Insurance, Nationwide, Northwestern Mutual, Prudential, RBS, C: Lorne Whitmore, Vice President,
Société Générale Securities Services, and State Street. MIG21, PFS’s award-winning investment Global Sales & Product Management
compliance and risk monitoring solution, optimizes pre-trade and post-trade compliance E: lwhitmore@pfs.com
checking, the administration of regulatory, prospectus, and internal investment guidelines A: 600 College Road East,
along with the consequent resolution workflows. PFS, headquartered in Princeton (NJ), has Princeton, NJ 08540, USA
offices located throughout the United States, Canada, Australia, Singapore, and China as well W: www.pfs.com, www.pfs.aquin.com
as in United Kingdom, the Netherlands, Luxembourg, France, Germany, and Switzerland.

Founded in 2002, Redi2 Technologies is a leading provider of fee billing solutions to the
global financial services industry. Redi2 offers flexible, feature-rich solutions that help
firms streamline operations, improve cash flow, reduce costs, enhance client service and Redi2 Technologies, Inc.
meet compliance obligations. 1771 Broadway St.
Redi2’s flagship fee billing and revenue management solution Redi2 Revenue Manager Oakland, CA 94612
helps financial professionals more easily manage the fee billing process, including client T: +1 (510) 834-7334
setup, multi-currency fee and accrual calculations, invoice and advice generation, E: info@redi2.com
W: www.redi2.com
accrual reconciliation, adjustments and reversals.
Our open APIs and support for industry-standard relational databases ease integration
with third-party solutions, including accounting, performance measurement and CRM
systems.

Netik’s team have spent the past 25 years perfecting the art of bringing
together market, reference, portfolio accounting, performance and risk data For more information please
from disparate sources into a single version of the truth (SVOTTTM). The result visit: www.netik.com
is a highly scalable and sophisticated business data model that has been or email: marketing@netik.com
designed to process all securities and offers a complete model for traditional
and alternative markets.

SimCorp Dimension is a powerful, comprehensive and truly seamless investment


management system. It can handle NAV and other calculations, with complete related
T: +44 (0)20 7260 1900
accounting, for a huge variety of fund structures and product types, including regional
F: +44 (0)20 7260 1911
specialities.
C: Elizabeth Gee, sales director
SimCorp Dimension has been designed from scratch as an enterprise-wide system, of SimCorp Dimension
handling all aspects of the investment management process and related administration E: elizabeth.gee@simcorp.com
functions, consistently. Data is recorded once into a core database so that reporting is W: www.simcorpdimension.com
made easy, there is no reconciliation of data and no duplication of procedures. A: SimCorp, 100 Wood Street,
-By cutting latency in securities processing, our clients are recognising new efficiencies, London EC2V 7AN
reducing costs and increasing throughput
-By streamlining their customer on-boarding processes, our clients are gaining faster
access to fees, increasing customer satisfaction, gaining greater cross-sell opportunities.

32

24-32 ISJ38 APR5.indd 32 6/4/09 13:44:56


The North American
Securities Lending Forum
Presented by

GSL |
Global
Securities
Lending

LIQUIDITY
RISK
REGULATION

Limited places available Four Seasons Hotel


Register now at New York
www.securitieslendingforum.com Wed June 10th 2009

Sponsors

DE+GSL Sec Lend Forum ISJ38.indd 40 6/4/09 18:40:11


Nordic/Baltic Excellence
SEB is the leading provider of custody and clearing services in the
Nordic/Baltic region.
Business is built on long standing partnerships with our clients.
Our commitments are efficiency, reliability and providing the highest
service quality.
For further information please contact: Global Head of Custody Services: Göran Fors,
goran.fors@seb.se. Head of Sub-Custody Client Relations: Ulf Norén, ulf.noren@seb.se.

ISJ_SEB_Eye_Map_203x267.indd 1 07-07-13 07.58.43