Tom Kirkpatrick
Deadlines are in the nature of any business. Mike Megaw and Tom Kirkpatrick
of SS&C GlobeOp reveal how they help fund mangers deal with theirs
There have been reports that some fund managers weren’t ready for the AIFMD Annex IV reporting deadline—what about your clients?
Mike Megaw: All of our clients that signed up with our service met the deadline—that is something we take a lot of pride in. We did take clients on board that realised—quite late—that the deadline was coming up and that they had to deal with it. We have been doing regulatory filings for our clients since 2012 and we know what is required to get it done. The ways in which regulators accept filings always varies, so there is a need to be aware of this and plan ahead, and then help our clients manage through them.
How much support did regulators give fund managers with AIFMD Annex IV reporting?
Megaw: In some cases, regulators provided very good support, but in other instances it was probably difficult on the regulator’s end. I think the issue with this regulation is that it is very complex, there is a lot of data to be collected and aggregated, and I think some of the regulators struggled with getting their systems ready for this data. This is a new type of filing, after all, so there were some technical issues in different jurisdictions with regulators. In particular, some jurisdictions posted guidance close to the deadline or required formats were changed for managers to be able to file.
These are all issues that we as a provider have gone through before with regulators, so it wasn’t something new to us. Regulators have had to adapt before and we have to adapt to changes they make.
How have they coped with all the data submitted?
Megaw: I think it is a little early to tell. Right now is when they are collecting the data, looking at it and analysing it, and they are also probably trying to find where things succeeded and where they were not as smooth. They are going to work those out, so it’s a little early to tell where they are internally and what they are doing with the data collected.
With this type of regulation, right now is the digestive period for regulators to figure out what went well and what didn’t go well, and how they can improve it for meeting future deadlines.
Specifically, how did SS&C make filing easier for clients?
Megaw: With any complex filing, it’s important to have gone through the process before. In the lead up to the Annex IV deadline, there was always going to be issues because regulators were doing this for the first time, and when they’re accepting large, complex amounts of data, something is inevitably going to go wrong.
We knew we had to have the proper experts and technology in place to be able to adapt when something did need changing. When systems went down the day before the filings were supposed to be made, it just meant that we had to adjust our workload so that when they came back online we could carry on. Adaptive technology is important too, because you have to know enough about technology to be able to change when the regulator’s needs change. What we have developed really allowed us to be able to do that, so we met the deadline and got filings done.
Tom Kirkpatrick: I would characterise it as experience, planning and execution, and I think our experience comes from what we learnt through filing with US regulators. As soon as legislation is issued, we have to work out what is the same and what is different, how it will affect our technology, what coding is required, and what structures we need in place.
The execution comes in getting clients on board and helping them to understand what the requirements actually are, preparing the data and then completing the reports. Of course, then you have to deal with unexpected events.
What were some of the late challenges that you faced?
Megaw: The main late challenge was systems going offline. That really puts pressure on your workload. There are also, always, issues with the format in which the regulator wants reports. It’s typically XML but the regulator will release a specification for the data types that it’s willing to accept. If that changes close to the deadline, you have to be able to adapt what you are able to submit if it is going to be accepted and processed properly.
Those were the main issues with Annex IV, mainly because there were a lot of jurisdictions attempting to do the same thing but with variations in how it was implemented.
What’s next now the deadline for Annex IV has passed?
Kirkpatrick: We always try to improve on our processes and technology. I think those are two things that we review, so we can be of even more help to our clients and always do a better job for them. We have a very scalable solution. As new regulations are published, guidance issued or technology needed, we have a very nimble infrastructure that can meet those deadlines and assist our clients in meeting their obligations.
