Date: 01 January 2016
Operational risk and its mitigation is a pertinent topic right now. The new regulatory environment is forcing asset managers to adhere to strict operating and reporting standards; investors are demanding tight operational controls to protect their assets; managers are seeking to minimise middle and back office costs whilst delivering against these growing demands.
Superimpose a growing instrument complexity, activity spread across multiple service providers and increased trading frequency and it soon becomes apparent that a new approach is required to manage operational risk and keep costs low. Given the fragmentation of the trading process both in terms of service providers and systems and often weak information exchange between investment manager, counterparty, prime broker and administrator, one of the primary tools in the armoury of the operations function is inter-system reconciliation. Simply, is the data our traders see in the order management system actually what is held by us at the bank? Do the reports we send to our clients tie back to the equivalent sent by the administrator; will they question us as to why they are different?
Download this reportDuncan has over 30 years experience in the financial markets working in both New York and London. He was previously Global Head of Operations for a $350bn asset manager, Head of Operations at a London hedge fund and Head of Back and Middle Office Development at the largest hedge fund in Europe. Duncan is a keen sailor and can be found regularly crossing the channel in his yacht 'Liquid Asset'.
