The challenge of complexity: The impact of corporate actions processing, part 3

By Tongjai Lertphaisan

Do you regularly miss deadlines? Are your systems manual and error-prone? Are you looking for ways to improve your firm’s corporate action processing?

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The many benefits of tax process automation

By John Pavlakis

In an increasingly complex business world, the benefits of tax process automation have been known for some time. Automating a tax process increases compliance accuracy, efficiency, collaboration, and transparency. It also mitigates undue burdens on personnel, frees up time for greater data analysis, and allows for a more sustainable tax platform.

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Private capital versus the banks

By Kamran Anwar

U.S. mid-market corporates regularly solicit funds from capital markets to help finance their operations. In Europe, most mid-market firms still obtain their financing from banks, but this is changing.

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High energy and high demand for loan management at LendIt USA 2017

By: Errol Winter

This year’s LendIt USA conference hosted about 6,000 financial professionals in New York City at the Jacob Javits Center on March 6th and 7th. The 2-day annual conference is well known among industry leaders who participate in online marketplace lending. LendIt hosts the largest series of conferences that provide a great opportunity for the online lending community to meet in person and connect in central locations across the US, Europe, and China.

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Access – a key issue of cyber risks

By Lisa McLaughlin, Information Security Officer

Today, cyber threats are real and ever changing. In response, regulatory rules must constantly evolve in attempt to mitigate this dynamic threat. In the first of this two-part blog series, we’ll take a look into the complex roles of in-house attorneys and security professionals, and how they are intrinsic to the success of your business by protecting your organization’s sensitive information.

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How scalable is your lending operation?

By: Bishal Thapa

With a paradigm shift from traditional to alternative lending, the alternative lending industry is facing unprecedented growth. Non-banks, marketplace lenders, mezzanine lenders, mortgage REITs, and funds that originate loans must all be prepared to accommodate a growing demand for their services. They must effectively manage their growth so they can remain operationally efficient, nimble, and profitable.

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The Unique Nature of Direct Lending Funds

By: Alex Tarantino

Investment

Alternative finance is growing rapidly in Europe and is fast becoming an established investment strategy. Loans are a unique asset class that must be treated quite separately from bonds. This poses new challenges for firms entering the direct lending market. Continue reading

Expanding Chinese Investment Opportunities

By: Chris Schmutz

display stock market numbers in a street

Over the past year, China has experienced a number of changes that open new opportunities for Chinese investors. These are important opportunities to be aware of since they’re driving how Chinese investors are using their assets, so I thought a recap of the latest developments would be helpful.

Last year China announced liberalizing measures that expose large foreign international investors (central banks, sovereign wealth funds [SWFs], financial organizations) to its $5.4 trillion interbank bond market (CIBM). This allows these investors to trade domestic bonds and forward contracts, bond repurchase agreements, and interest rate swaps without having to obtain pre-approval from the People’s Bank of China (PBOC) or complete time-consuming registration forms. The measures have now been extended to other financial institutions including asset managers, commercial banks, and securities firms, but not to hedge funds. This facilitates enhanced international investor interest in China at a crucial juncture.

Mutual Recognition of Funds (MRF) also launched in 2015. It allows for Hong Kong managers to sell their vehicles to mainland retail investors and for Chinese asset managers to sell into Hong Kong. Before MRF, if they wanted to distribute into China, foreign asset managers were required to enter into an equity partnership with a mainland financial institution. While this was risky and expensive, most foreign managers would still use mainland distributors because the domestic retail market was hesitant to invest in stand-alone foreign managers. While market volatility slowed regulatory approvals in Hong Kong and China, the first MRF approvals were granted in December 2015. It is too early to tell if MRF will be extended to other fund jurisdictions. Some expect that there may be regional trials (e.g. in Singapore and Taiwan) before it’s extended to established UCITS and Alternative Investment Fund Manager (AIFM) domiciles (e.g. Ireland and Luxembourg).

Stock Connect is also gaining traction. Stock Connect allows investors to trade Chinese A Shares and mainland investors to gain exposure to Hong Kong-listed securities. It enables foreign asset managers to transact in mainland securities. Stock Connect may also be extended further afield. It is likely that Shenzhen’s stock exchange will be on-boarded onto Stock Connect at some point this year, and the UK has been shortlisted as a possible candidate as well.

Despite being a tough market for hedge funds to break into, a handful of foreign hedge funds have used the Qualified Domestic Limited Partnership Program (QDLP) to win mandates from high-net-worth-individuals (HNWI) in Shanghai. These managers can raise only a limited amount of capital and these quotas have not been extended as the government seeks to reduce capital outflows following the market turbulence. Nonetheless, these early adopters feel they will reap the first mover advantage benefits as HNWIs become more accustomed to hedge funds.  

As HNWIs adapt, funds will need to look into options to support the processing and administration of a broadening range of asset classes and geographies in multiple currencies and in accordance with varying local and global accounting standards. Managers will also need a way to organize and share valuable research so that they have more time to evaluate, deliberate and execute on new investment ideas. As the market continues to change, it’s important that managers keep up with the change and adapt their business and approach accordingly.