Automating Institutional Investment and Custodian/TA to TA Flows for Hedge Funds

Size: px

Start display at page:

Download "Automating Institutional Investment and Custodian/TA to TA Flows for Hedge Funds"

Beverly Houston
10 years ago
Views:

1 Automating Investment and Custodian/TA to TA Flows for Hedge Funds David Hardman 27th June 2006 Slide 1 Enabling the automation of investments into Hedge Funds AGENDA Exploring opportunities to automate: SWIFTNet Funds Slide 2 1

Enabling the automation of investments into Hedge Funds

2 The Hedge Fund and Fund of Fund order flows High Net Worth Investor Private Bank Wealth Mgt Hedge Fund or Fund of Fund Manager Custodian Custodian Hedge Fund Administrator Agent Prime Broker Cash s Hedge Fund of fund order flows Cash Message/Report Hedge Fund Flows Slide 3 An opportunity to automate Investor Custodian Hedge Fund TA ISO Messages will Automate the following flows: s - Subscriptions/Redemptions Statement of holdings Confirmations/Cancellations/ Switches ing / NAV calculation Cash flow/forecast Statement of executed funds transactions s & Re-registration Account opening & maintenance Fees Static data Requests for statements Statement of pending funds transactions Hedge Fund Manager Slide 4 2

Automate the following flows: s - Subscriptions/Redemptions Statement of holdings Confirmations/Cancellations/ Switches ing / NAV calculation Cash flow/forecast Statement of

3 s message order flow I intend to invest $1,000,000 (subscription pre-advice) Instructing Party OK, I will invest $1,000,000 ( subscription document ) I invest another $1,000,000 (subsequent subscription) Executing Party Slide 5 Message Standards ISO message standards for funds ISO message standards for funds Are ISO message standards Fit for purpose in Hedge Fund processing? Slide 6 3

subscription) Executing Party Slide 5 Message Standards ISO 15022 message standards for funds ISO

4 Funds ISO message flow - hedge funds overview (Custodian) MT 502 MT 509 MT 515 Confirmation MT 535 Statement of Holdings Agent (Hedge Fund Administrator) MT 103 / 202 Payment Cash Agent/s Slide 7 Funds ISO message flow - hedge funds overview (custodian) If new investment / account has not been set up Account opening instruction ( subscription agreement ) Account details confirmation Subscription order status Subscription confirmation Statement transactions & holdings (hedge fund administrator) Fund cash forecast report (estimated or confirmed) or direct cash account relationship Cash /s manager Slide 8 4

not been set up Account opening instruction ( subscription agreement ) Account details confirmation Subscription order status Subscription confirmation

5 Funds ISO message flow hedge fund of funds overview (custodian) administrator (transfer ) custodian dept Confirmation (hedge fund administrator) (account has already been set up) Cash Agent/s Cash /s or direct cash account relationship There will be two or more sets of flows depending on how many funds there are in the fund of funds. Slide 9 Funds ISO message flow hedge fund of funds overview (custodian) Confirmation Statements administrator (transfer ) custodian dept Confirmation Statements (hedge fund administrator) Cash Agent/s Cash /s Fund cash forecast report (estimated or confirmed) (account has already been set up) or direct cash account relationship Manager Slide 10 5

Slide 9 Funds ISO 20022 message flow hedge fund of funds overview (custodian) Confirmation Statements administrator (transfer ) custodian dept Confirmation Statements (hedge

6 s subscription document We have analysed an example of a subscription document. Superficially, we can say it contains information about: Investor & type of, general eligibility, beneficial ownership, trust ownership Compliance with anti-money laundering regulations Supporting documents such as a Form of Incumbency, AML, Letter of Reference The fund, types of shares How the subscription will be paid The subscription amount Additional subscription form Redemption of shares form Account opening message Account opening confirmation (confirms the account opening & quotes the account number) Subscription order message Redemption order message Slide 11 Questions? Where do we do start?! Slide 12 6

regulations Supporting documents such as a Form of Incumbency, AML, Letter of Reference The fund, types of shares How the subscription will be paid The subscription amount

7 7

p r o v i d i n g c o n f i d e n c e t h r o u g h p e r f o r m a n c e

p r o v i d i n g c o n f i d e n c e t h r o u g h p e r f o r m a n c e Our Services Trident Fund Services a division of the Trident Trust Group offers fund sponsors an independent outsourced back office