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Social Network for Investment Compliance and Compliance advisory information. All these at your finger tip. Currently, this segment is very niche and finding accurate information is very tricky and mostly no one is around to answer your question.
What the the biggest challenges you face related to Investment compliance monitoring?
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See lessWhile calculating 5/10/40 UCITDS rule should we be excluding TD (term deposit)
**Term deposits** are **excluded** from the calculation of the 5/10/40 rule, as they are not considered as transferable securities or other eligible assets for UCITS funds . Term deposits are fixed-term contracts with a bank or financial institution that pay a fixed interest rate at maturity. They aRead more
**Term deposits** are **excluded** from the calculation of the 5/10/40 rule, as they are not considered as transferable securities or other eligible assets for UCITS funds . Term deposits are fixed-term contracts with a bank or financial institution that pay a fixed interest rate at maturity. They are not traded on a regulated market and do not have a diversified issuer.
You can find more information about the UCITS investment and borrowing powers in the FCA Handbook and the ESMA Q&A I hope this helps you. 😊
Source:
See less(1) ESMA updates its Q&As on the UCITS Directive
(2) Chapter 5 Investment and borrowing powers – FCA Handbook. https://www.handbook.fca.org.uk/handbook/COLL/5.pdf.
(3) COLL 5.2 General investment powers and limits for UCITS schemes. https://www.handbook.fca.org.uk/handbook/COLL/5/2.html.
ESG transition
The length of the transitional period for an Environmental, Social, and Governance (ESG) transition of an existing fund will depend on a variety of factors, including the size and complexity of the fund, the extent of the ESG changes being made, and the resources available for the transition. In genRead more
The length of the transitional period for an Environmental, Social, and Governance (ESG) transition of an existing fund will depend on a variety of factors, including the size and complexity of the fund, the extent of the ESG changes being made, and the resources available for the transition. In general, longer transitional periods may be necessary for larger and more complex funds, or for transitions that involve significant changes to the fund’s investment strategy or holdings.
It is important to carefully plan and manage the transition period to ensure a smooth and successful transition to an ESG-focused fund. This may include setting clear goals and milestones for the transition, engaging with stakeholders such as investors and regulators, and allocating sufficient resources to support the transition.
In general, a transitional period of several months to a year may be sufficient for many ESG transitions, but the specific length of time will depend on the specific circumstances of the fund and the nature of the changes being made. It may be helpful to consult with industry experts and ESG specialists to determine the appropriate length of the transitional period for your fund.
See lessIs Climate Bond Standard Board a regulatory body?
The Climate Bond Standard Board (CBSB) is not a regulatory body. It is an independent, not-for-profit organization that develops and maintains the Climate Bond Standard, a set of guidelines for labelling and verifying bonds that finance climate change solutions. The CBSB is funded by membership feesRead more
The Climate Bond Standard Board (CBSB) is not a regulatory body. It is an independent, not-for-profit organization that develops and maintains the Climate Bond Standard, a set of guidelines for labelling and verifying bonds that finance climate change solutions. The CBSB is funded by membership fees and donations from organizations and individuals who support its mission to accelerate the development of a low-carbon economy through the use of bonds.
While the CBSB is not a regulatory body, it works closely with regulatory authorities and other stakeholders to promote the use of climate bonds as a tool for addressing climate change. It is recognized as a leading authority on climate bonds and its standards and certification scheme are widely respected in the financial industry.
See lessCompliance role in value creation
An investment compliance role is responsible for ensuring that a financial institution or investment firm complies with all relevant laws, regulations, and internal policies and procedures when making investment decisions. This includes reviewing investment proposals and transactions to ensure thatRead more
An investment compliance role is responsible for ensuring that a financial institution or investment firm complies with all relevant laws, regulations, and internal policies and procedures when making investment decisions. This includes reviewing investment proposals and transactions to ensure that they are in compliance with legal and regulatory requirements and do not pose any unnecessary risks to the firm or its clients.
In terms of value creation, an investment compliance role can contribute in several ways:
- Protecting the firm’s reputation: Ensuring compliance with laws and regulations helps to maintain the firm’s reputation as a trustworthy and responsible investment manager, which can enhance its reputation and attract new clients.
- Reducing risk: By identifying and preventing non-compliant activities, an investment compliance role can help to reduce the risk of financial losses or regulatory penalties, which can preserve and even enhance the firm’s value.
- Facilitating efficient operations: A well-run compliance program can help to streamline investment processes and ensure that the firm’s operations are running smoothly and efficiently, which can improve the firm’s overall performance and create value for its stakeholders.
- Enhancing transparency: By promoting transparency and disclosure in investment activities, an investment compliance role can help to build trust with clients and other stakeholders, which can create value for the firm.
See lessWash Sale
A wash sale is a type of securities transaction in which an investor sells a security at a loss and then repurchases the same security or substantially identical security within 30 days before or after the sale. This type of transaction is generally not allowed for tax purposes, because it allows anRead more
A wash sale is a type of securities transaction in which an investor sells a security at a loss and then repurchases the same security or substantially identical security within 30 days before or after the sale. This type of transaction is generally not allowed for tax purposes, because it allows an investor to claim a tax loss on a sale while retaining the same investment position.
Investment compliance departments can put in place controls to monitor wash sales in several ways:
Trading surveillance: Investment firms can use trading surveillance systems to monitor wash sales by analyzing trading patterns and identifying transactions that may be indicative of wash sales.
Account monitoring: Investment firms can also monitor individual accounts for suspicious activity, including wash sales. This may involve reviewing account activity and looking for patterns suggesting a wash sale has occurred.
Training and education: Investment firms can provide training and education to employees on the risks and consequences of wash sales, and ensure that they understand the firm’s policies and procedures for preventing and detecting wash sales.
Policies and procedures: Investment firms can also establish policies and procedures for identifying and preventing wash sales, and ensure that these policies are followed by employees. This may include requiring employees to report any potential wash sales and conducting regular reviews of transactions to identify and address any potential wash sales.
See lessShould I join the Investment Compliance division in an Investment Management firm?
there are 2parts to this question Should I join? : Absolutely No. If you are ambitious in Finance then you should never join a compliance division. if you are a fresher, then yes compliance can be a gateway to something big. How lucrative is the Investment compliance division of an Investment ManageRead more
there are 2parts to this question
Should I join? : Absolutely No. If you are ambitious in Finance then you should never join a compliance division. if you are a fresher, then yes compliance can be a gateway to something big.
How lucrative is the Investment compliance division of an Investment Management firm? – Irrespective of the region, this is a lucrative field. The reason being you get a deeper understanding of the regulatory environment.
See lessWhat are transferable securities as defined in UCITS?
Transferable securities are anything that you can transfer ownership of without consent of a third party. For e.g.: While purchasing a common stock, you do not require permission from the issuer rather it can be traded freely in the market. A transferable security is an investment which is any of thRead more
Transferable securities are anything that you can transfer ownership of without consent of a third party. For e.g.: While purchasing a common stock, you do not require permission from the issuer rather it can be traded freely in the market.
A transferable security is an investment which is any of the following:
See less(a) a share.
(b) a debenture or an alternative debenture
(c) a government and public security.
(d) a warrant; or
(e) a certificate representing certain securities.
ESG Vendors
Most Preferred - Sustainalytics. Longest in the game I would say MSCI. Vendor to watch out for. - CLARITY AI Honourable mention : Refinitiv, Bloomberg Vendors that need to up their game : Moody's ESG
Most Preferred – Sustainalytics. Longest in the game I would say MSCI. Vendor to watch out for. – CLARITY AI
Honourable mention : Refinitiv, Bloomberg
Vendors that need to up their game : Moody’s ESG
See lessSec 22e-4 Liquidity Risk Management Program
In my opinion - Yes. If you hold mnpi on an issuer, you (without getting into unfair practice) cannot act on that mnpi which means if its negative news hitting the market, you cannot offload your holdings. Now there are multiple school of thoughts but while dealing with SEC, I try to be conservativeRead more
In my opinion – Yes. If you hold mnpi on an issuer, you (without getting into unfair practice) cannot act on that mnpi which means if its negative news hitting the market, you cannot offload your holdings. Now there are multiple school of thoughts but while dealing with SEC, I try to be conservative as SEC is silent on these scenarios. Since each fund has to devise its own classification of Liquidity buckets, I tend to mark any sell restriction in 40 act accounts as Illiquid.
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