Enhanced Technology and Consulting Capabilities Assist in Navigation of New Risk Management, Valuation, and Reporting Obligations for Fund Managers
Chatham Financial, an independent full-service advisory and technology solutions provider, today announced new capabilities within its consulting practice and flagship ChathamDirect Software-as-a-Service (SaaS) platform to help fund managers navigate several upcoming regulatory requirements under the Alternative Investment Fund Management Directive (AIFMD) and the European Market Infrastructure Regulation (EMIR). Compliance with the new requirements presents significant challenges for the asset management industry, as funds will soon be required to value assets, debt, and derivatives independently from portfolio management.
First, beginning July 22, AIFMD will require registered fund managers, among other things, to independently value all of their assets and liabilities, including derivatives. Firms will also be required to adopt detailed valuation policies and procedures as well as establish a permanent and independent risk management function.
Second, by August 12, funds subject to AIFMD must begin reporting daily valuations for all fund-level derivatives and collateral arrangements to a trade repository under EMIR. Requirements for both regulatory regimes apply to fund managers marketing or managing funds in Europe.
“As AIFMD and EMIR requirements converge, an exponential increase in terms of regulatory complexity for fund managers follows. This is because funds managed under AIFMD in turn become ‘financial counterparties’ in the eyes of EMIR,” said Phong Dinh, a director with Chatham Financial. “As a result, these funds will become subject to a strict set of EMIR regulations. With many fund managers not currently prepared or perhaps even aware of these new rules, it’s crucial that these organizations take steps to ensure they’re fully compliant with both regimes.”
“These new requirements present an enormous challenge for fund managers to handle internally, should they choose that route. Compliance with the daily valuation reporting component alone will require a firm to have in place a sophisticated degree of know-how, not to mention the technological infrastructure,” added Christina Norland, a director with Chatham Financial. “By combining a cutting-edge technology offering with the expertise of Chatham’s team, we can help fund managers bridge the gap to compliance.”
Chatham Financial’s regulatory compliance services are part of theChathamDirect web-based SaaS technology platform, which is built upon the firm’s 20-plus years of consulting experience in the global derivatives markets, including helping companies navigate reporting obligations brought on by EMIR in Europe and the Dodd-Frank Act in the U.S.
