SimCorp, a leading provider of investment management solutions and services for the global financial services industry, has released a new paper, “The Investment Book of Record: One Version of Truth from Front- to Back-Office.”
Authored by Marc Schröter, head of strategic research at SimCorp, the paper tackles the problems associated with fragmented position-keeping across the trade lifecycle. “When investment processes and asset classes are supported by multiple systems across the front- to back-office, it is impossible to gain an accurate view on true portfolio positions,” notes Schröter. “The risk of poor decision-making is inevitably higher when portfolio managers are working off bad data.”
The paper proposes that the Investment Book of Record, or IBOR, becomes the single repository that combines front-office start-of-day positions with back-office end-of-day positions. The IBOR will centralize position-keeping across the entire trade lifecycle and will provide investment managers a comprehensive view of positions and exposures. The IBOR will also manage up-to-date transaction lifecycle status, reflecting current and historical transactions as well as a forecast of securities and cash balances.
Additionally, the paper outlines the value of the IBOR in assisting investment managers comply with the onslaught of regulatory reforms. Legislation such as a Dodd-Frank, EMIR and Solvency II are united by a common denominator – the need for an accurate view of exposures across counterparties, collateral and the underlying derivatives. “The complexity involved in exposure calculation and mandated regulatory reporting will make compliance an uphill battle without a solid investment book of record in place,” continues Schröter. “Instead of creating piecemeal compliance solutions, regulation by regulation, the IBOR affords investment managers economies of scale in architecting an enterprise solution that will support compliance for today’s regulations as well as regulations of the future.”
