Counterparty credit risk was often ignored before the financial crisis. Now, with impact on the bottom line confirmed, those dealing with OTC derivatives are not only being asked to pay more attention to it, but also to value it.
What to do about AIFMD? A question being asked by Non-EU Portfolio Managers, including in the US. And one of the main talking points is, unsurprisingly, the famous remuneration rules. Is there a way around them? Who do they apply to? What should I be doing? Just a few questions my colleagues Chrystelle Veeckmans, Jane Wilkinson, Charles Muller and Julien Bieber expect to hear when they attend the ALFI roadshow next week. I was able to give them a few insights into what US Portfolio managers might expect.
The popularity of posts on BEPS on this blog has confirmed what we already knew from conversations with clients: the initiative is no longer a blip on the radar but a genuine cause for concern prompting a real desire to know what’s involved. So, to help you on your journey, we have come up with 3 quick and easy ways to boost your BEPS confidence.
Investment funds have long sought relief from consolidation, and the International Accounting Standards Board (IASB) has responded with an industry-specific solution which came into effect on 1 January this year.
12 August 2014 – Daily derivative trade reporting of valuation and collateral exposure becomes effective
The second stage of the reporting obligation came into effect on 12 August 2014, just 6 months after the first reporting stage went live on 12 February 2014. All financial counterparties must report their trade valuation and all posted collateral on a daily basis for their derivatives trades to one of the six authorized trade repositories (TRs1) under EMIR. Where counterparties do not collateralize on a transaction level basis, counterparties shall report to a TR collateral posted on a portfolio basis, and additionally shall report to the TR a code identifying the portfolio of collateral posted to the other counterparty. Non-financial counterparties not exceeding the clearing threshold shall not be required to report collateral, mark to market, or mark to model valuations of the contracts to TRs. Reporting valuations and collateral applies on a daily basis where contracts are concluded, modified or terminated2.
For this ALFI Global Distribution Conference, we’ve decided to take a slightly different approach to the ban on inducements. This issue has, of course, been at the heart of the MiFID debate for all kinds of fund distributers: from banks to fund promoters to independent financial advisors. The pros and cons of a ban on inducements have already been argued and disputed in many articles. However, rather than looking at the debate, we want to ask a question: what if?
With the focus for this ALFI conference on the future and megatrends, I wanted to share this video which really puts this into perspective. The clients of tomorrow are likely to be very different from the clients of today: more “diverse, informed and demanding”. Several demographic drivers are behind the changes:
Change is vital. Change is everywhere. And most of all: change is not limited to only parts of your organisation, it impacts a whole industry. At KPMG, we believe that the future for the investment management industry is very positive and yet to capture the opportunities presented, it will have to overcome unprecedented challenges.