April 2009

Volume 6 No. 38
GBP 25 - UK, ROW
USD 45 - America
EUR 35 - EMEA
www.ISJ.tv

Analyse this - SEPA today

Profile - Jon Robson, Thomson Reuters
Panel - Benelux Fund Administration
THE GLOBAL SECURITIES SERVICES INDUSTRY MAGAZINE

New role for

the Old Lady
Could a privatised Bank of England
mean better regulation?

Outsourcing - Who, where, why, how?

Russia - An investor challenge
Sec lending reinvestment - Money market funds
Hedge Fund Technology - Compliance & complexity

Front Cover Section ISJ38.indd 1 6/4/09 18:00:22

 ISLA & RMA Present

18th
Annual 2009
Conference on 23 26 june

international securities lending

Hotel Arts • Barcelona, Spain

The joint U.S./European Securities Lending Conference sponsored by the two

recognized industry associations.
Issues that influence lending markets in
Europe and around the world:
• Change in Regulatory Requirements Affecting
Securities Lending.
• Beneficial Owners: Are You Lending Securities
Now?
• Industry Leaders: Surviving the Crisis and
What’s Next for the Market?
• Central Counterparty and Recommendations
of ISLA Working Group.
Keynote Address:
Risk Management Lessons from the Financial
Crisis
Juan Andres Yanes, Chief Risk Officer,
Grupo Santander, Madrid
This is the conference that identifies best
market practices and sets global standards in
international securities lending.

Come and join your colleagues for these important

updates and discussions!

For more information and to register visit RMA’s Web site:

www.rmahq.org/RMA/SecuritiesLending/
or contact Kim Gordon (215) 446-4021,
E-mail: kgordon@rmahq.org

Conference Chair: David Hopton, Managing Director, Santander

Global Banking & Markets, London
 ISJ Investor Services Journal Heads up

Industry consolidation in both the asset management and hedge fund

space is another driver of technology spend. Mergers will create larger
firms that have greater amounts of capital to spend on technology.
Over the last 5 years, the number of acquisitions has generally trended
upwards. Following a dip in 2007, there was a large spike in M&A activ-
ity in 2008. Hedge fund consolidation is being facilitated by
acquisitions of alternative investment firms by larger financial institu-
tions including universal banks and large asset managers. M&A
activity also creates demand for IT because acquirers need to assimi-
late acquisitions technologically. Consolidation increases the need for
an integrated approach to technology with common products, systems,
P.22 SEPA P.17 Fund Administration P.15 Russia Marketand Profistandards
le P.17business
across Fund Administration P.15consolidation
units. However, market Russia Market Profile
may also prompt reviews of spending to streamline operations and
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 costs, diminishing technology demand.

Figure 5: Asian Investment Management Industry Consolidation

Asian investment management consolidation
P.06 News

Number of outright acquisitions

Asian Investment Management Industry
Our monthly Consolidation
30
30
Last year saw a steep
selection of the key

Number of outright acquisitions

stories, reports and 25
25 incline in the amount
annoncements from 20 of consolidation in the
ISJ.tv 15 asset management
15
space as many more
10
10
of the strong survived
Editor:
Ben Roberts 55 and the weak were
Ben@2ipartners.com poached.
Editor’s letter 00 SOURCE: Bloomberg
Contributors: 2004
2004 2005
2005 2006
2006 2007
2007 2008
2008
Brian Bollen,
Anthony harrington Cautious hope Source: Bloomberg
back office functions is a profit; some no longer
Account managers:
tarik Rekiouak We are one quarter down an example. Providers of exist. Many pension funds
As the Asian investment management industry grows and more new
Tarik@2ipartners.com
Mark needham
in what should be called the outsourcing services are have held firm with their
players enter the market, firms are looking for ways to remain compet-
itive. Firms are turning to advanced technologies to give themselves an
mark.needham@2ipartners.com year of reconstruction. The offering an increasingly hedge fund allocation amid
edge. They are adopting technologies that support more complicated
Senior account manager: meeting of the G20 leaders diverse set of services for – in revisions of liquidity in
trades and sophisticated trading strategies. They are also looking to
Patricia De La Grange reduce costs as well as maintain client confidentiality and keep their
Trish@2ipartners.com
in London was well-timed particular – asset managers, some of the world’s biggest
activities private by circumventing brokers.
as we enter the second taking on much of the retirement plans.
Business development manager:
James olweny quarter, though despite a administrative
There and rise
has been a significant post- Much and
in multi-asset, cross-asset, external
cross- scrutiny
James@2ipartners.com border trading, which is driving adoption of technologies that support
knee-jerk stock market lift trade burden to allow them will remain
these complicated trades. Cross-asset trading (when an equity security
on the operations
website developer: Peter Ainsworth
peter@2ipartners.com
(including a week-long rise to focus
is bought and on stockis written
an option market of hedge
at the same time, funds
e.g., foreign secu-and the wider
in US stocks that rivalled twists
rity bought,and newis sources
FX hedge made) and cross-border ‘shadow banking’
trading (trading across system.
Systems developer: Kushtrim ukaj exchanges of different countries) have been expanding across Asian
Kushtrim@2ipartners.com 2007) and a USD1,000 of value. In this issue ISJ focuses on
Data administrator: Annika Elvrum
billion contribution to the Cost savings, a decline their internal processes,
annika@2ipartners.com International Monetary in personel and tapping and analyses the technology
operations manager: Sue whittle Fund, the longer-term 10
provider’s expertise are top offerings that facilitate
Copyright 2009 © Oliver Wyman
Sue@2ipartners.com
effects of their uneasy unity reasons for this activity. On trading, administration and
Commercial director:
Jon hewson
on sentiment and an open, page 10, ISJ investigates the client reporting.
Jon@2ipartners.com global trading floor against outsourcing trend, including Regulation - or rather,
CEo: Mark Latham protectionist tendencies is companies that offer what it will become - is
Mark@2ipartners.com
undefined. solutions to these providers. another area undefined
2i Media plc Some areas of the market Hedge funds may look following the meeting of
uK
16-17 Little Portland Street, seem to be sensing a turning upon the second quarter with the world leaders. In the
London W1W 8BP, UK
T: +44 (0) 20 7299 7700 point. Shareholders in HSBC muted optimism. A partial UK there are growing calls
F: +44 (0) 20 7636 6044 snapped up 97% of the bank defence of their sector from for change to the regulatory
uSA in a rights issue, a significant Lord Turner of the Financial structure. The unpopularity
410 Park Avenue, 15th Floor
New York, NY 10022 statement of intent and a Services Authority was with the FSA has led to
T: +1 212 231 8421
F: +1 212 231 8121
reemergence of the long welcomed by AIMA and kept suggestions as to the role
position in a bank. the emphasis on banks and of the Bank of England as
© 2009 2i Media plc
All rights reserved. No part of this In the midst of AIG. Reports have shown its replacement as the City
publication may be reproduced, in whole
or in part, without prior written
uncertainty and change, new money flowing again into watchdog, an issue discussed
permission from the publishers. combinations of securities hedge funds after a greatly on page 7. n
ISSn 1744-151X.
services continue to develop. varied last year for the
Printed in the UK Outsourcing middle and sector: some funds recorded Ben Roberts, Editor

1-16 ISJ38 APR5.indd 1 5/4/09 22:54:03

 Contents ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Contents
Richard Davies,Analyse This
page 22
In this issue Custody

COVER STORY 04 Letters to the editor 15 Climate not changed

Russia - Is the invetsor
06 News and mandates services market for foreign
The last month of updates in institutions still a Churchillian
custody, clearing and settlement, “riddle, wrapped in a mystery,
securities lending, legal and inside an enigma”.
compliance and technology.
17
ISJ Panel Debate
07 Regulation - Benelux fund
Cover - Banking on administration ISJ asks
industry experts about the
revolution
servicing of funds in the region. Climate not changed Russia,
Our new series on New Model
Banking begins by looking at page 15
calls for a privatisation and a Securities Lending
re-empowerment of the Bank of
England.
20
Reinvesting the wheel -
08 People
Cash collateral
Profile - Jon Robson, The use of cash collateral has
Thomson Reuters been an ongoing concern in
The head of Enterprise Strategic securities lending - with money
Business Unit of the firm’s market funds a viable option,
Markets Division talks to Ben finds Brian Bollen.
Roberts.
New role for the Old Lady
Regulation, page 7 Payments
10 Fund Administration

Outsourcing - Middle
to back office
Cost saving and expertise
are driving the outsourcing
phenomenon, finds Ben Roberts.
22
Analyse This - SEPA Reinvesting the wheel The many
today homes for cash collateral, page 20
Richard Davies at Logica assesses
the initiative for 2009.

12 Technology
25
MEMBER - periodical Directory of services
publishers association
ISJ’s exclusive monthly listing
Hedge with an edge
of key service providers to the
- Technology - Anthony
Harrington surveys the product global asset services industry.
www.abc.org.uk
offerings for hedge funds
to renew your subscription
please telephone:
+44 (0)20 7299 7700
or visit... WWW.ISJ.tv
Leonique van Houwelingen
Panel member, page 17

1-16 ISJ38 APR5.indd 2 5/4/09 22:54:09

1-16 ISJ38 APR5.indd 3 5/4/09 22:54:10
 Letters
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Dear ISJ
Prior to the financial
meltdown, Islamic private
banking was blossoming with
high-net worth individuals
looking to invest their wealth.
Now with the credit crunch
biting, banks are aiming to
increase customer deposits to
level the value of their credit/
deposit ratios. Here is one
perspective on what Islamic
private banking could look
like in the future:
As individual Islamic
banks have their own Shari’a
committee, Islamic asset
managers could construct
portfolios around individual
client ethics. In traditional
Islamic private banking,
this tailored service is only
delivered to ultra-high net
worth clients with large
portfolios. If Islamic banks
have to deliver this service to
all clients, the cost of doing
so may skew the market in
the direction of ultra-high
net worth individuals.
Islamic private banks will
also need to ensure that all
their investments comply
with Islamic law. Banks
will have to create their
own indexes to reflect their
individual interpretations
of Shari’a law. To do this,
advanced Islamic banking
systems will be required
to ensure all activities are
Shari’a compliant.
Finally, Islamic private
banks may need to take a
more social view of their
investments, beyond the mere
accrual of investor wealth.
1-16 ISJ38 APR5.indd 4
ISJ Investor Services Journal
Letters
This will impact the way
portfolios are managed and
centralized system (I mean
CSD or system of CSDs) in
“Only a Russian
require asset managers to be
both creative and flexible.
Russia. This system can be
established on NDC and
depository can
One thing is clear, to
remain in the game, these
DCC base but this is another
decision.
be a nominee.
banks will need to offer
superior private banking
In the last two years, before
the crisis, we saw an increase
It seems this
services via a customer- in the number of foreign barrier makes
centric systems architecture investors in Russia. But after
to meet the satisfaction levels the start of the crisis we’ve it difficult for
of the high net worth market. obviously seen a decrease.
Today we’re seeing overseas some investors
n Dr. Mohamed Goneid, speculators return. Foreign
Islamic banking strategy investors prefer to invest in to enter the
manager, Temenos government and corporate
bonds, and equities (firstly in market”
blue chips).
Dear ISJ There are a number of optimising the infrastructure
other areas we believe need to (in particular the registrars).
be looked at. Obviously, simplifying
The development strategy for First, the question about the infrastructure can
the financial market in Russia foreign nominees in Russia help increase and improve
requires the creation of a needs to be decided. As operations.
centralised accounting system you know, in Russia only a Third - possible changes
for the Russian securities Russian depository can be in the Russian tax regime are
market. as nominee because only needed, i.e. the tax regime
Because the Russian a Russian entity is allowed for foreigners and tax for
prime minister announced a custody license. It seems dividends etc.).
that Russia plans to create this barrier makes it difficult These questions are all being
financial centre in five years, for some types of investors discussed in Russia at the
you might think that a CSD - from the US, for instance – moment at the various levels,
can appear in the Russian to enter the market. But it’s i.e. FFSM, State Duma &
market within this time. But not simply that the Russian Russian senate.
in fact at the moment Russian authorities want to avoid
authorities don’t have a final liquidity problems in the n Mikhail Bratanov, Head
decision about the form of market. What they want is to of Securities Services
the centralised accounting find a balance between the development for SGSS in
system on the securities existence of foreign nominees Russia
market. and the need for liquidity in
This is first important the market. Turn to page 15 for our
question to be answered. Second - reducing the investor services report
Once this is decided infrastructure costs and on Russia
we can try to make a
sensible estimate about
To express your views, write to ben@2ipartners.com or blog at www.ISJ.tv
the time needed to create a
5/4/09 22:54:11
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1-16 ISJ38
Caceis advAPR5.indd 5
climb EN 203x267H.indd 1 5/4/09 22:54:11
8/04/08 14:20:01
 News
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Custody
J.P. Morgan Worldwide Securities
Services has been appointed by
Marshall Capital Partners, to
provide fund administration.
Marshall Capital has USD2.5
billion of assets under
management, comprised of
Russian institutional and
international investors.
The appointment is J.P. Morgan’s
first for its Private Equity Fund
Services in Russia.
The class action undertaken by
two UK pension funds against
RBS in the US on the grounds
of withheld information as to
the health of the bank is “not
surprising”, according to David
Paterson, head of corporate
governance at the National
Association of Pension Funds
(NAPF).
The case – constructed by the
Merseyside Pension Fund and
the North Yorkshire Pension
Fund and represented by Cherie
Booth, QC, wife of former UK
prime minister Tony Blair - has
been launched in the US to take
advantage of the ‘no win, no fee’
class action principle, which does
not exist in the UK and can be
expensive for the loser.
It was revealed that Société
Month Winner Client Location Assignment Mandate size
March Northern Trust
..............................................................................................................................................................................................
February RBC Dexia
February L&G Investmn’t Man. Oxfordshire Co. Council
February Sage Advisory Servs.
1-16 ISJ38 APR5.indd 6
Générale Securities Services’
(SGSS) German business, (SGSS
KAG), won seven Master KAG*
mandates and two outsourcing
mandates in 2008. These
mandates bring the total of
assets under administration
for SGSS in Germany to EUR55
billion (31st December 2008),
an increase of 20% compared
to 2007.
Fund Administration
Earth Capital Partners (ECP),
a new investment business
with a specialist focus on
environmental investment,
selected Northern Trust to
provide administration services
for its fund platform.
Clearing
Broadridge Financial Solutions,
has extended its multi-currency
Gloss securities processing
system to include Japanese
equities, convertible bonds and
subscription rights processed by
on-shore broker-dealers.
EuroCCP, the European
subsidiary of The Depository
Trust & Clearing Corporation
(DTCC), will slash its clearing
fees from six euro cents to
five euro cents per side from
1st April - the lowest fee level
Latest mandates
Earth Capital Partners London Fund Administration USD5 billion
Creststreet Ass’t Man. Toronto Custody/fund services n/a
London UK Equity Portfolio GBP850 million
Texas State University Austin, TX USD12 million FI core strategy
charged for clearing in Europe.
The price cut is on the back
of increasing competition
in trading, specifically from
new multi-lateral trading
facilities such as Chi-X and the
growing demand for the all-in
cost advantage of efficient,
low-cost and robust central
counterparties.
It will apply to all trades
submitted to EuroCCP for
clearing and settlement.
EuroCCP currently clears and
settles trades executed on the
Turquoise, NYSE Arca Europe and
SmartPool trading platforms.
Technology
EXENET LLC, the IT consulting,
integration and outsourcing
service provider, has launched
ProServo™ Managed Support
for Alternative Assets, a tool
for small to medium-sized asset
management firms efficiently
and cost-effectively manage
their IT.
Fundtech Ltd (NASDAQ: FNDT),
announced the acquisition of
InterSoftware Ltd, through its
UK-based division Accountis
Europe Ltd.
Following the acquisition,
InterSofware Bacstel-IP users
will have access to a wider
ISJ Investor Services Journal
range of products and services
in areas such as direct debit and
credit management, remittance
notification, fully automated
enterprise payment workflow and
electronic invoicing presentment
and payment (EIPP).
Risk management requirements
have extended amid the credit
crisis, with derivatives, stress
tests and value-at-risk (VAR) now
integral to the mix, according
to a survey of asset managers by
Sophis.
The study revealed 63%
of managers believed risk
management had changed, with
35% believing it had changed
“significantly”.
Also, 73% believed it is essential
to have an integrated view of
risk that includes derivatives.
Three-quarters will increase the
volume of stress tests and VAR
reports that they carry out, and
65% will improve pricing and
data models.
Reval, a provider for derivative
risk management and hedge fund
accounting, has opened a Hong
Kong office and appointed of Will
Marsden as sales director, Asia.
The opening marks Reval’s
continued growth, expansion
and commitment within Asia
Pacific that includes Australia,
New Zealand and India. n
5/4/09 22:54:11
 ISJ Investor Services Journal
Banking on revolution
First in our series
looking at New Model
Banking - the role of
the central bank.
The Bank of England, the 315-year-
old central bank for the United
Kingdom, must soon move down one of
the paths from the crossroads at which
it stands. Its interest rate cuts – from
5.2% a year ago to barely over zero today
- have seized headlines. The timeliness
of its cuts has divided opinion, and
the effective use of such measures as a
counterpoint to inflation is in question.
But other voices expressing deeper
issues have emerged in the last few
weeks. As juries remain out as to what
the ‘Authority’ in Financial Services
Authority really means in the context of
enormous bank losses, nationalisation
in all but name and plummeting public
confidence after a decade of ascent for
financial services, a reappraisal of the
Bank’s role in the regulation of the City
of London has been a leitmotif.
Governor’s facial hair
David Cameron, leader of the
Conservatives and the Government’s
chief opposition, on 22nd March
advocated the reestablishment of the
Bank’ authority over financial services.
One movement of the [Bank of
England] Governor’s eyebrow, he said,
should be an ominous sign for the banks
to fall into line.
A more dramatic and detailed
extension to this view came from a paper
released by the Institute of Economic
Affairs. Entitled ‘Central banking in a
free society’, the study advocates the re-
privatisation of the Bank, capitalised by
a consortium of banking owners. last-resort role and instead have a
This would reverse its nationalisation
in 1946 and resemble the Federal
Reserve in the US. The paper echoed
Mr Cameron’s view that it should again
wield industry authority.
Professor Tim Congden, who
1-16 ISJ38 APR5.indd 7
authored the paper, explained to ISJ
that the governorship of Mervyn King
and the implementation of the FSA
have eroded the Bank of England’s
successful relationship with the banks.
As previously lender-of-last-resort in
the case of a downturn, the central
bank would have known the contents
of banks’ balance sheets and the risks
“The FSA has
become extremely
unpopular”
they were taking. The FSA, the Debt
Management Office and Governor
King’s own outlook have separated
the Bank from this role and has been
replaced by an emphasis on research.
Return of norm
“This vision of the central bank
is deeply flawed and should return
to the historical norm: a Bank with
responsibility for banking supervision,
a responsibility for lending last resort,
responsibility for managing public debt,
and where most of the staff are not
economists but actually bankers,” he
said. “The tendency since the collapse
of [mortgage lender] Northern Rock
has been for the Bank of England to
continue to jettison the lender-of-
special resolution regime for banks in
difficulties, to strengthen insurance, to
prefund the safest compensation – I
deplore all of these things.”
The FSA has become “extremely
unpopular” with the financial industry,
New Model Banking - Regulation
and described the chance of the
wholesale side of financial institutions
leaving these shores for ECB and Federal
Reserve-regulated markets as “a real
threat”. Specifically, the FSA’s failure is
in its regulation of all areas of financial
service. Before, Congden notes, a
stock broker would be regulated by an
exchange, an insurer by the DGI.
Within this there was self regulation.
“With self regulation the industry
decides what structure it likes,” he says,
before adding, “it doesn’t give it carte
blanche”.
For the Bank of England, and the
industry, to operate correctly, the Bank
should be re-empowered and privatised.
The banking consortium would act
as financiers, giving necessary capital for
the central bank. Congden argues that
one reason that the Bank has failed is
its small capitalisation - “around GBP2
billion” - where it needs to get Treasury
approval to loan money. Congden says
the Federal Reserves asks for about 6%
of bank’s capital, using only half of that.
The Bank of England would need to
ensure a profit could be made.
But there would be additonal,
regulatory benefits of this system too.
“Banks would resent incurring losses
to pay for lending of last resort if one
of its members needed financial help,”
he says. “If you have a situation in
which all the banks were shareholders,
then a situation such as over the last
five years where HBOS had a number
of irresponsible property loans and
Lloyds TSB was very careful, Lloyds TSB
would know there would be a high risk,
and that they would have to support a
lender-of-last-resort loan to HBOS. In
advance, they would tell the Governor
and flag up what is happening.
“The Bank would have to go to
HBOS and say, ‘you’re breaking rules, we
won’t lend to you when there’s a crisis’.
So there are checks and balances within
the system. No bank wants to bail out
another bank. It’s putting is a structure
that gives the right incentives.” n
5/4/09 22:54:12

Profile
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Cross assets, cross continents
Profile: Jon Robson
Thomson Reuters
“What is it that the market
wants next?” asks Jon Robson from
underneath the orange electronic snake
of ticker that curls around the Thomson
Reuters building in London’s Canary
Wharf.
“What they want is to see the whole
picture of a trading environment.”
This environment, spurred by
globalisation and technology, can be
almost anywhere, changing the way
international markets can operate.
People are no longer tied to exchanges
for market updates. “Twenty years ago,
you would go to an exchange and see
the price of a security; when you left,
you couldn’t see it.”
Robson, head of Enterprise Strategic
Business Unit of Thomson Reuters’
Markets Division, oversees a breadth of
data services to provide this “picture” of
market activity for an equal breadth of
clients: from traders and risk managers
to hedge funds, stock exchanges and
wealth managers. His career has spanned
a number of continents, start-ups,
innovations, acquisitions, and one of
the biggest mergers in financial services
between Thomson and Reuters at the
beginning of 2008.
Thomson Reuters’ suite of enterprise-
wide solutions can sit within a bank
and, importantly, is neutral enough
to work with the bank’s existing
technology. “Why not provide a means
for investment banks to link all those
systems,” he asks, and compares this
central system to a “dashboard”. A
firm need not undergo an entire
overhaul of their software, he says,
which has significant cost and training
implications. But for trading, portfolio
valuation, pricing, compliance and all
the other functions that may have their
own gadgetry, Thomson Reuters aims to
connect them all.
But information is only one
component of knowledge, and Robson
1-16 ISJ38 APR5.indd 8
is enthusiastic about the consultancy
that can be provided. “We can create a
customer advisory board focusing on
specific areas where information and
experiences can be shared,” he explains.
“The global community needs to come
together in order to run well ordered
markets.”
Providing business solutions, and
not just products, has been a mainstay
“The global
community needs
to come together
in order to run well
ordered markets.”
of Robson’s career. One of his first
significant positions within the financial
technology space was at BIS Banking
Systems, now Misys, across Europe and
Asia. It began a significant career stint in
the Far East. “I was asked if I’d like to go
to Asia and I thought it would be for a
few weeks, not a few years.”
As a successful company, it serviced
ISJ
ISJ 26
26
ISJ Investor Services Journal
growing companies – “You needed both
the product and the business solution –
how can we get you into business as fast
as possible?”
He moved to Telerate – the market
data provider of benchmark data on
fixed-income securities, currencies
and derivatives - and then become
EVP for Dow Jones Markets in 1997.
The same year was appointed as a
non-executive on the board of inter-
dealer broker Icap. Soon after he set
up MoneyLine, a hosted Internet-
based service that combined real-
time trading data with historical
content and was officially launched
in 1998. The company was a success
in both Europe and Asia, with content
partners such as Dow Jones Newswires,
S&P and Interactive Data.
“People needed a means of
communicating with the market,” he
explains, “and MoneyLine was able to
provide that.”
By September 2001, the company was
in a position to acquire Telerate. This
created MoneyLine Telerate.
He joined Reuters at the beginning of
2003 as global head of fixed income, and
as a further foray into the fixed income
space, the firm bought MoneyLine
Telerate at the end of 2004 in an
estimated USD175 million deal.
Robson then became president of
Reuters America, leading the business to
high profits in its United States, South
America and Canada, and head of
Reuters Focus Group Accounts program.
He relocated to London in 2008.
This year, he sees potentially more
business servicing hedge funds.
“The level of service prime brokers
were offering changed - there are
new opportunities for us to provide
those services as hedge funds require
applications data and content.” n
Jon Robson is President of the Enterprise
Markets Division at Thomson Reuters
7/4/09 10:57:11
ISJ
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1-16 ISJ38 APR5.indd 9 5/4/09 22:54:16

 Outsourcing
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Outsourcing
Cost saving and a well
of expertise is driving
the growth of out-
sourcing the middle
and back office, finds
Ben Roberts
The financial crisis has not changed
the capacity that technology and new
ideas can enhance institutions, even if
purse strings are pulled ever tighter. The
outsourcing of parts of the middle-to-
back office is one such example where
new software, new partnerships and new
structures of process can unite to help
cut costs of institutions still hopeful for
an upturn this calendar year.
Providers of outsourcing services
can range from boutique technology
developers to larger, post-trade lifecycle
specialists to banks. BNY Mellon is
an example of the latter. The bank,
conspicuous by its absence in the
headlines of the financial crisis, has
developed a broad range of asset
services targeted at its peer group and
asset managers – essentially a custody
mandate of administrative services
without a pension fund attached.
Daron Pearce, head of UK and
Ireland, says the growth of outsourcing
demand has grown with the credit crisis,
particularly for asset management firms.
Though it may seem more intuitive to
have external outsourcing partnerships
during the good years, and revert to
protective, in-house operations in the
onset of a market downturn, the reverse
is the case.
“In a positive market environment
where you are not struggling to cover
your cost, the doctrine is to have
everything in house,” he says. “We’ve
seen it twice in the last decade. There
was a significant downturn in the stock
market after the dot.com bubble of 2001,
markets were depressed and we saw a
lot of deals come to market. Then from
1-16 ISJ38 APR5.indd 10
2005 to 2007 there was nothing in the
outsourcing space of any significance.”
In the last six months, however,
the company has been “awash with
opportunities again”. “There has
been a direct correlation between a
fall in markets and rising number of
outsourcing deals.”
Shannon Goode at SS&C
Technologies notes that asset managers
pay fixed costs to deploy technology and
the staff to run it, and this is unattractive
in difficult market conditions in which
the revenue from the assets they manage
is variable. “As these assets go down, fees
to manage go down, but their cost to
support that remain fixed. Going to an
outsourcing vehicle tends to match the
variable cost structure.”
Goode says the impulse to outsource
has increased since the beginning of this
year. In the few months up tot he end of
2008, he says, managers were frozen in
the initial shock of the market decline.
“I used the analogy that they were
like deers in headlights – they weren’t
doing that a lot as I think people were
surprised at how drastically the market
went down. But I’m seeing quite a but
of pick up in this quarter, people saying,
‘okay, time to make the move.”
Smaller firms, in which the decision
maker is often the princoipal, are
often able to move faster and strike
10
ISJ Investor Services Journal
outsourcing deals, adds Goode. Larger
firms can take a longer time due to a
more entrenched bureaucratic process. .
What asset managers call the back
office, Pearce adds, a custodian would
call the middle office, and opportunities
are there to offer the full service. “In
our asset servicing model we’ll support
everything that’s post trade execution.
So if you look at the trader lifecycle and
trade confirmation, to compliance, to
settlement, custody, client reporting,
performance analytics and transfer
agency fund accountancy.”
Long running link-ups of this sort
have further benefits, and there’s a
strong relationship between providing
an outsource service and providing
a custody service. “If you create that
accurate book of records, there are a
number of things you can do with that
enable us to have cost synergies that a
single asset manager couldn’t possibly
match,” says Pearce.
“For example, a fund manager
managing a mutual fund needs to
produce a daily NAV position on that
fund for publication. You need to have
a portfolio valued for the ongoing
management of that fund, a position
of the custody book and you need to
provide a transfer agency record for
investors.
“If you outsource all those services
5/4/09 22:54:16
 ISJ Investor Services Journal
to a single provider, they’re not going
to create four different instances of the
book of record. We will have a single
instance with which we price a mutual
fund that will be consistent with the
custody record based on the same data
to provide automatic triangulation and
reconciliation with the transfer agency
record.”
Robin Kneale, head of strategy,
Securities Processing Solutions,
International, Broadridge, adds that
apart from cost, outsourcing service
opportunities can be sought from new
entrants to the market - small traders,
broker dealers or portfolio managers
without a comprehensive middle and
back office.
“It’s fair to say that in the UK those
that have outsourced have tended to be
small- to medium-sized companies,”
he says. In today’s market environment
there have inevitably been fewer
start-ups, he says, though the growth
in merger activity may lead to new
revenue streams for providers. “Merged
companies would not necessarily have a
common infrastructure for transaction
processing and so may consider
outsourcing,” he says. “Also, banks might
often have a single infrastructure for all
the different parts of the bank in terms
of trading and brokerage. When a part of
that bank splits from the rest, it will no
longer have that facility.”
Broadridge’s outsourcing division,
Ridge Clearing & Outsourcing Solutions,
specialises in clearing and settlement
services. Ridge’s services are a significant
line of business for the firm.
By bringing together a lot of clients
we can make their volumes of trades
processing cost effective, explains
Kneale. A transaction-based fee structure
is typical, he adds. The Ridge service is
fully established in the US market where
it serves over 100 correspondents and
is now growing its presence within the
UK market through its FSA-authorised
entity. The rest of Europe has the
potential to be a longer-term target, adds
Kneale, though the clearing space is a
competitive environment. In Germany,
for example, a number of transaction
banks provide clearing.
1-16 ISJ38 APR5.indd 11
Transparency is a consideration
in outsourcing as with fund
administration. Though a client will
hand over its back office to a third party,
it wants to retain a view on processes,
says Kneale.
Geoff Harries, director of product
strategy at CheckFree, a solution
provider for transaction banking that
includes fee billing and order entryoffers
a capability largely through the
investment management community,
says: “There’s a whole trade lifecycle
- from trade capture, enrichment,
validation, verification, routing before
you get to settlement - to ensure stock
or cash moves effectively. Ultimately,
anything we do in giving greater
visibility or transparency of where a
trade sits in its lifecycle would allow
people to better management their
cash position as they would be able to
see with more certainty if it has been
confirmed or unconfirmed.”
Pearce adds that outsourcing is
part of a circular function: from the
asset manager client to the outsourced
custodian back to the asset manager. The
[asset manager] execute the transaction,
they tell us about the transactions,
we confirm with their brokers in the
market, we settle it either ourselves or
instruct others to make a settlement and
report back the updated position so they
can continue to trade their portfolios.
So it takes out all the traditional asset
management back office.”
To complete the picture, outsourcers
will themselves outsource to service
providers. Harries says CheckFree
supplies to “seven out of the top ten”
global outsourcers. “We deliver [our
trade lifecycle solution] to a number of
the largest asset servicers in the world
who use it to support other investment
managers.”
He adds that outsourcing mandates
can be very specific, often reflecting the
deficiency in expertise inthe operations
of those looking to outsource. Further,
he has found that frms will often
outsource by asset class. “While they
might be happy to run their equity
operations, they may not want to run
their derivatives operation.”
11
Outsourcing
Software as a service (Saas) is a
significant development in investment
firms looking to outource at a low cost.
Essentially, software is developed and
operated by companies like Calypso
and SmartStream, and leased to clients.
Smartstream’s Transaction Lifecycle
Management (TLM) system has been
particularly progressive in the area of
trade reconciliation, and in March 2009
extended it via SaaS of this product to
small and mid-sized businesses.
The offering helps firms of this size to
boost automation levels.
“Customers of all sizes, but
particularly those in the mid and lower
tiers, no longer have to compromise
on the tools they use to improve
efficiency, lower transaction costs
and reduce operational risk,” said
Philippe Chambadal, the new CEO of
Smartstream, at the launch of the TLM
OnDemand system.
Smartstream discovered through
research that 65% of financial sector
companies were used SaaS in more than
two key business areas, compared to
52% of all companies in the survey.
Alastair McGill, marketing drector
at Smartstream, told ISJ that a SaaS
outsourcing offering for smaller firms
would help “level the playing field”.
Pars Perawal, UK Investment
Management, Real Estate
and Alternatives Leader, at
PricewaterhouseCoopers, said at a recent
press briefing in association with the
CBI expects outsourcing to continue.
Daron Pearce at BNY Mellon emphasises
that asset management will inevitably
want to focus on its core function. “They
are paid entirely by the value of the asset
they value and those value are massively
depressed right now”.
Harries also anticipates an increase
in outsourcing activity. “If someone’s
looking at a new asset class they want
to mover into – ten years ago youd
naturally create an operational cap to
support it in house. That’s really not the
case anymore. I think people would have
to rationalise carefully why they’d want
to develop an in-house capability today
if they can procure that service from
established providers. ” n
5/4/09 22:54:16
 Hedge Fund Technology
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
Hedge with an edge
Anthony Harrington surveys the technological
solutions available to hedge funds.
Like a game of Cluedo (Clue for North
American readers), cautious investors
want to know the motive, weapons and
whereabouts of hedge funds. Managers
and CIOs can rightly expect inquiries,
if not outright insistence, as to the
investment methodology. The funds will
look to systems providers to help them
achieve the kite marks of transparency
and compliance – no matter how
onerous the new regulations might be.
Frequently the demand for
transparency comes from investors. Fred
Jacobs, head of business development
for alternative investment services at
SS&C, describes investors - though
inmportant before the crisis - have been
elevated to the level of “king”, and have
been scrutinising a hedge fund’s service
provider. “The more you require a fund
to do from an operational standpoint
the better it is for some one like us that
has all the bells and whistles,” he says.
Hugues Delage, product manager
at Horizon Software, which provides
portfolio management, valuation and
pricing and risk management systems
for hedge funds, finds the sector
particularly demanding. “In some ways,
whatever works for hedge funds will
work for traditional funds as well, but
you have to be clear that a system that is
good for UCITS III compliance will not
work for hedge funds. You need much
more specificity, with a broad range of
instrument types,” he says.
But budgets for such services are
undoubtedly under intense pressure.
“There is a great deal of cost reduction
going on across the sector at the
moment. People will sacrifice flexibility
right now if it gives them a cheaper
license and lower maintenance costs.
They are looking for plug and play
architectures that can be set up without
1-16 ISJ38 APR5.indd 12
huge bespoke costs,” adds Delage.
‘Hosted’ services – ‘pay as you go’
models where the software provision is
combined with a web-based solution -
are growing in popularity as funds look
to avoid large up front payments nor pay
for maintenance. However, Delage says
paranoia over data remains a powerful
“brake” on moves to application service
provider (ASP) style solutions. “People
get paranoid about their data being
held hostage by the service provider.
But hedge fund managers are under
tremendous cost pressure, so ASP is
coming up for discussion more,” he says.
The challenge is to find or agree
pricing mechanisms with the clients for
the more complex derivatives. Delages
cite Brazilian swaptions as an example.
A swaption, or swap/option confers the
right, but not the obligation, to enter
into a swap within an agreed time frame.
“Strange” foreign exchange
derivatives are another area - Horizon
has its own quantitative analysts who
build models for pricing these and other
instruments. “What you need is both the
ability to propose mathematical models
that work, and flexible architecture that
allows you to use other people’s model
libraries, if this is the way they want to
go. With our system you can plug and
play different models as you require.”
Value at Risk modelling - the
probability that a portfolio’s mark-to-
market loss over a time period would
exceed its value - and stress testing are
two further considerations. “In a high
volume market, VaR can introduce
errors, so many investors these days will
require a hedge fund to produce stress
tests for them before they invest – so
they can see events like Lehman or 9/11
modelled for them,” he says.
Different sized hedge funds also have
12
ISJ Investor Services Journal
variations in their demands. Fred Jacobs
at SS&C says smaller funds need “a lot of
hand holding” as they often don’t haven’t
fully hired their staff so you’re helping
the with structural Infrastructure
such as reviewing offering documents
and helping to establish procedures
procedures. He adds, however, that small
funds may still be trading the esoteric
items of larger players, despite having
fewer strategies. Larger fund families
often have multiple strategies - long/
short, bank debt and fund of funds,
for example - that demands a complete
platform from the service provider.
Servicing larger funds often leads to
developments on the service side, in
fact. “One of our largest clients asked
to account for German tax, so we wrote
that into our systems.”
John Bourse, managing director of
SkyRoad, another portfolio management
systems provider, says that there is
tremendous demand from both risk
managers and traders for complete
visibility on risk positions. “The risk
manager is looking at macro type risk
moves and the trader wants to analyse
intra-day risk. We can provide this and
we can also consolidate it across traders,”
he says.
This last point can be very important:
a hedge fund may have three traders all
using very different strategies, but with
the same exposure to the same stock.
This needs to be consolidated so that
the risk manager can see the overall risk
to the firm posed by that accumulated
position,” Bourse says. As with Horizon,
SkyRoad’s valuation model can be
extended to embrace additional trading S
models, including the client’s own R
trading model. SkyRoad’s approach is a
pure ASP, using Citrix terminal server
to deliver services to the client’s desktop P
5/4/09 22:54:18
 1
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1-16 ISJ38 APR5.indd 13 5/4/09 22:54:19

 Hedge Fund Technology
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
anywhere in the world the client has
broadband access.
“The value-add we bring, apart
from the day-to-day services, is to help
the client to understand the life cycle
flows of trades,” says Bourse. “If a trade
is unwound or terminated, it shows
them the relationship between the
trading system and the prime broker, for
example, or the administrator.
“How does our system help a hedge
fund to become more transparent
to its investor base? We provide the
consolidation. We capture all the
activity of the fund and centralise and
consolidate it, which makes it much
easier for the hedge fund to be as
transparent to its investors as it wants or
needs to be,” he says.
Bourse says though it is too early to
identify the new regulatory framework,
transparency will be a big part of
the picture. He also expects funds of
funds to either want to do more of
their own trading, or to demand more
transparency from the funds that they
invest in. “We expect this to be a very
big trend in the next year or so,” he
comments.
Part of the challenge for systems
providers is that hedge funds come
in all shapes and sizes. This has been
a hindrance to the ASP style services
becoming widespread. As Bourse points
out, most ASP solutions demand that
the client fits the standardised solution.
His approach is to adapt the solution
to the client and the base system is
highly configurable. However, he argues
that technology is only half the battle.
“You need people with a great deal of
experience of the hedge fund industry
and of operational and risk system type
processing,” he says. “If the provider
makes a wrong decision about how a
trade should be processed, it can be very
expensive for all concerned.”
Data feeds such as volatility
information are still sought, particularly
when a swaption strategy needs to price
an option. Solving this problem means
working with the client, explains Bourse.
1-16 ISJ38 APR5.indd 14
“A typical system would just have a field
on the screen for the trader to enter the
volatility, but volatility changes all the
time. We work with the client to agree
where that information is going to come
from and how we are going to compute
it,” he says.
Each instance of the software is
unique, so that if there is something
proprietary about a client’s calculations,
it is only implemented in that particular
client’s system and none of SkyRoad’s
other customers get to see it.
Stuart Calder, director of Linedata
Services, says whatever shape future
regulation takes for hedge funds, having
increased control over the exposure the
fund is taking on derivatives will be a
“given”. “Regulators are really going
to want to know what steps funds are
taking to manage and support their risks
and derivatives will be a big part of this.
“This new era has really accelerated
the demise of the spread sheet as
any kind of a critical tool in risk or
compliance. From now on funds need
vendors with fully fledged risk and
compliance technology,” he comments.
“Risk and compliance, in many
ways, are two sides of the same coin.
Going forward, hedge funds are going
to have to operate like mini institutions,
or like long-only funds,” he says. In
fact, he adds, long-only investors have
started to take shorter positions and use
derivatives, while a number of hedge
funds have adopted long strategies.
“The big difference between the
sectors is that hedge fund strategies and
portfolios are still much demanding,
as are the types of instruments traded.
We have all been looking to make our
platforms much more derivatives aware
and they all need to run off reliable
versions of the data.”
Hedge funds have seen massive
outflows as investors, spooked by the
downturn and by the failure of some
hedge fund strategies, have looked to
repatriate their money. Assets under
management in the sector have shrunk
by as much as 50%.
14
ISJ Investor Services Journal
However, Calder points out that the
outperformance of hedge funds over
equities in February 2009 was one of
the highest it has ever been. “One of
the problems in forming a view on the
sector is that there is no definitive global
measure. Last week I saw one estimate
that put assets under management
(AUM) in the sector at USD1.8 trillion,
and I saw another in the same week that
put AUM at under USD1 trillion. That is
a huge margin of error,” he comments.
Robin Strong, director of market
strategy at Fidessa LatentZero, which
provides solutions for global asset
managers management industry and
smaller investment managers and
hedge funds, reveals consultants such
as Mercer and Watson Wyatt say their
clients are increasingly focused on
“demonstrable business control”. This
means industrial quality compliance and
risk control and hedge funds who want
to attract investment need to be able to
demonstrate in a very practical way that
they have the systems in place to satisfy
the concerns of investors, he comments.
He gives as an example a rule
which says that all bonds should be at
least single-A rated. A manager who
thinks a B-rated bond might be a good
investment could enter into a CDS swap
that would guarantee the B-bond as an
A-bond and that could either be allowed
or disallowed according to the rules set
up in the system.
“Hedge fund managers need to have
all of this integrated on a pre-trade basis
so that they can get a warning that will
prevent the trade from happening, if
it is outside the parameters allowed by
the fund – and blocking the trade at the
outset is a much better solution than
having to make a forced sale when you
discover that it is outside the rules.
“Today, it is all about how you
actively manage your risk exposures.
Institution managers used to put
their money into funds with good track
records. Now they put their money
into funds with good controls and good
track records.”n
5/4/09 22:54:19
 ISJ Investor Services Journal
Climate not changed
Foreign investors and
service providers alike
still face challenges in
Russia.
Another Russian failure will be the
last thing the strained Western financial
sector wants right now, especially with
a backdrop of a G20 Summit that
may help mend diplomatic rifts if not
produce cogent regulation.
The World Bank last month forecast
an economic contraction of 4.5% for the
country on the back of the decline in oil
price, though the Russian government
itself estimates a more moderate 2.2%.
The OECD expects a sharp reduction
in real gross domestic product
throughout this year with a pick-up in
2010. Inflation - 13.9% at the time of
writing - should decline by the end of
this year.
It has led to an abrupt volte-face for
the Western banks that clamboured for
market exposure before 1998.
This decade, they crept slowly back to
Russia without the pomp but still with
hope of profits - attracted in particular
by the 70% devaluation of the rouble.
When Lehman Brothers collapsed,
custodians such as Citi, ING, and Societe
Generale saw capital flight from Russia
at around USD12-16 billion a week.
But Dr Elizabeth Stephens, head of
political risk analysis at Jardine Lloyd
Thompson, sees many differences
between 2009 and the problems eleven
years ago: “The big difference between
today and the defaults in 1998 is that
today the Russian government is trying
to stabilise the value of the rouble. It has
been relatively successful but we have to
put it into context with falling value of
other currencies.”
The Russian stock market has fallen
70% since February, there has been a
huge destruction in value for investors
and billions of roubles have been wiped
off the value of shares.
“It’s not just financial fears but also
1-16 ISJ38 APR5.indd 15
fears regarding government action,”
says Stephens. “This has in some sense
precipitated the crisis in Russia. The
controversies of Shaklin and BP/TNK
have become the litmus test for foreign
investment into Russia, highlighting the
rule of law, or the lack thereof.”
Yet where investors go, custodians
must follow. The country now has a
number of domestic players, such as
Rosbank (owned by Societe Generale),
and VTB, along with the established
global brands of Citigroup and
JPMorgan. Domestic custodians usually
service domestic players, and foreign
custodians - such as ING - tend to their
“Foreign players
don’t have enough
understanding of
the local clients”
Rami Bourgi, SGSS
own book, or act as sub-custodian to
Western peers. This divide originated
during the 1990s, when new entrants to
the market failed to be satisfied with the
local infrastructure.
15
Russia
Perhaps most significantly, the
country lacks a central securities
depository - one characteristic that
tends to divide ‘developed’ and
‘emerging’ markets. Ian Twine, network
manager at HSBC who has overseen the
Russian operation for nearly four years,
says there has been talk of a CSD since
1998. Now the date of implementation
has been set for 2013, though in light
of this forecast he says simply: “don’t
hold your breath”. For the two main
depositories in the country - the DCC
and the NDC - any single system would
leave one of the two “with their nose
out of joint”.
No CSD puts a premium on trading.
Traditionally assets are held in the name
of the sub custodian in the local market
as the trading process falls short of the
kind of standards set by the US 1933
Securities Act.
These assets are therefore held
with the accounts with the company
registrars. If a security is traded between
two funds that have different sub-
custodians, and therefore different
registrars, there has traditionally been a
high re-registration fee, often as high as
20 bps for the value of the transaction.
Twine claims to have occasionally seen
registration fees of up to USD40,000.
Just a few years ago, explains Twine,
there were as many as 500 of these
registrars making a lot of money from
charging this fee.
The only way to avoid this cost is to
register the securites with one of the
two main depositories. Twine says his
team has been looking at using the DCC
to hold client assets. HSBC is close to
agreeing with ING, its sub custodian,
a legal agreement whereby it can offer
its London clients delivery-versus-
payment, a vital and common element
of Western market as a precaution to
counterparty risk.
However, he says, it would mean the
client would have to register the assets
with the DCC. These depositories
carry risk as they are
undercapitalised, he says, though
5/4/09 22:54:21
 Russia ISJ Investor Services Journal
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

there is no re-regitration fee. “We don’t

recommend the use of the DCC to Russian presence: SEB
hold client assets as they are not 17F5 Goran Fors, global head, custody sales
compliant, but if the client is willing to
take that risk and sign the addendum to own custodian clients the time being, there has
the custody agreement we have in place we over time will offer been slower investment
with them, we will hold the client stock this to other custodian into markets that have
in the name of the DCC.” and broker dealers that more ‘emerging market’
Twine adds that the risks associated invest into the market. characteristics but
with the depositories, along with the it’s still an important
lack of internationally recognised How are the mutual and market.
audit, causes many investors to pay the pension funds invested ? The market
registrar fee instead. However, he says, When did you establish a infrastructure still lacks
a few clients have signed this agreement presence in Russia? Mainly equities. a number of items,
and a few are discussing it. “If I go out There has been a high such as risk mitigation,
to clients and say, ‘we can provide you We bought a smaller percentage of shares delivery versus
with DVP’, I think evey client investing bank three or four years going into the energy payments, and there are
in Russia will be saying that’s what they ago that had its base sector. A fund or pension still issues as to how
want; they don’t to send two instructions in St Petersburg. Out of fund would invest in a corporate events are
– one for stock, one for cash – and they that we built a number broad rage of papers, we handled.
want settlement in three days.” of business areas, and have several hundreds of It does not have a
The lack of set regulation for last year we opened up underlying securities for proper central securities
corporate actions is another stumbling a sub custody service our clients. depository. Delivery
block. If a company has an annual for foreign institutions versus payment would
general meeting, it is frequently only entering into Russia. We How do you assess the mitigate the risk for the
obligated to pay dividends within the have two businesses, the market? counterparts, a lot of the
calendar year, rather than a typical global and sub custody. trading is done over the
Western standard of 30 days after the The Russian market has counter and the payment
meeting. What is the make up of grown enormously if you for trades are done in
But according to Ramy Bourgi, head the clients? look one and a half years US dollars outside the
of emerging markets development, back. country.
SGSS: “Foreign players don’t have It was a smaller After September, It’s more complex
enough understanding of the local operation focused on the Russian market has to serve local clients -
clients because traditionally they have retail business but also come down quite a lot your setup needs to be
only catered for the global book.” does corporate business. and has been one of the different, everything
The French bank’s partnership with We have a big client biggest fallers in the from client procedures to
Rosbank appears to be a sensible bridge base in Nordic countries world. Nordic customers reporting systems.
between foreign and domestic. that invest into Russia, activity has come down Over time we’ll be
However, though custodians like it’s a big market for the along with asset values. looking to service local
SGSS are still winning mandates for mutual fund business. The interest is still there; clients but that will be at
future investment into Russia, the In servicing our it’s more long term. For a later stage. n
missing pieces of the infrastructure
jigsaw is difficult to create any kind of
momentum of foreign inflows. Setting nothing settles on this basis because of have paper allotment forms.”
up systems that are Swift compliant are the potential re-registration elements”. However, in four years up the present,
therefore vital for winning future foreign The market, though dematerialised, is a change to mindset, if not operations, is
mandates. still a manual process. “The instruction evident. Twine cites the liberalisation of
Bougi says fewer registrars and might come through onto the lender’s the Rouble as an example.
a major central depository are vital system as STP, but thereafter it’s a very “We’ve seen more possibility for
additions for any emerged market. manual process.” Twine compares the foreign investment in Russia. I suppose
Twine says the concept of a contractural system to that of London in the 1980s. that’s down to the Russians themselves
settlement day is “irrelevant” in the “I’ve been to a registrar in Russia and it that they saw opportunity for them
Russian market - “everything is dealt is very much like in the UK then, where when Western financial companies want
with on a T+3 basis, but predominantly you queue up round the block and you to invest in their country.” n

16

1-16 ISJ38 APR5.indd 16 5/4/09 22:54:22

 ISJ Investor Services Journal Head 2 Head

Head 2 Head

Sebastien Danloy is global head of sales and Leonique van Houwelingen, Head of
relationship management at SGSS. He has Relationship Management, Netherlands at
worked at the European Court of Auditors in BNY Mellon Asset Servicing.
Luxembourg, State Street and BNP Paribas.

Benelux fund administration

Experts from two leading
providers in the Benelux region
examine fund administration.
Belgium, the Netherlands and
Luxembourg have weathered
the financial crisis comparatively
1. In declining markets, is it possible to strike a balance between
relaxing fair value if needed in the short term with installing this
principle in the long term?
DANLOY: Fair value is an absolute requirement. Until now, most fund
administrators have been using book cost or counterparty pricing to
value unlisted securities. These OTC and structured instruments were
not independently valued and this has led to some artificial valua-
tions. It is essential that fund managers and institutional investors
accept to use third party independent valuations and that service
providers offer this solution to their client base. OTC derivatives and
structured product pricing are two elements that are key. There are
17
well in a global context.
But they are greatly varied
markets, with numerous
challenges for the provider of
fund administration, from
clients to regulators.
today only a limited number of providers that have these capabilities
and they should benefit from their expertise in that area.
VAN HOUWELINGEN: This is difficult to answer, as ultimately that will
have to be determined by the market. If an asset is illiquid, the ques-
tion then is what is a fair price? In many cases you will find a vendor
that is willing to provide a price – but if there is no party willing to buy
that asset, then the price remains merely theoretical.
2. The investment landscape in the Netherlands and Luxembourg
in particular – including for fund managers of pensions – have a
strong investment preference for alternative assets, such as swaps

17-23 ISJ38 APR5.indd 17 6/4/09 14:51:11

 Head 2 Head
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
and socially responsible invest-
ments. What challenges does
this pose for the administrator?
DANLOY: As far as Societe
Generale Securities Services
is concerned, it does not pose
any specific issues. We have
the capabilities to service fund
“Given today’s
markets, it
is generally
understood
that many of
the traditional
‘leveraged’
hedge funds
will disappear”
Leonique van
Houwelingen,
BNY Mellon
managers with an end-to-end
solutions covering listed and
OTC derivatives. Several pension
funds already leverage this
particular expertise we have built
in-house over the last few years.
Compliance for SRIs is probably
the one element that needs to be
carefully looked at.
VAN HOUWELINGEN: The chal-
lenge is always to keep pace with
the creativity of the front office
and ensure that our products and
services are flexible enough to
FactLines
The net assets of Luxembourg UCIs increased by 0.76%
in January 2009 to a figure of 1 571.534 billion euros
(source ALFI).
BNY Mellon has more than 25% of the pension market
in The Netherlands.
Total asset size for the pension funds in The Nether-
lands is over EUR 700 billion.
Belgian pension funds suffered a negative return of
20.5% in 2008, the Belgian Association of Pension In-
stitutions (BVPI) has revealed. For reference in 2002,
losses were averaged at -12.1%
17-23 ISJ38 APR5.indd 18
be tailored to meet individual
clients specific needs. Accord-
ingly, we stay very close to our
clients – indeed, our role today
has become far more consultative
in nature than has historically
been the case, we are now far
more embedded in our clients’
businesses. Of course, this also
means that you have to commit
to the required reinvestment
in technology and intellectual
capital year after year, and that
is something many smaller or less
focused providers are finding in-
creasingly hard to countenance.
3. Post-Madoff there has been
increased market emphasis on
on independent adminstrator,
particularly for hedge funds.
Will independent administra-
tion and audit become a manda-
tory part of the Benelux region?
DANLOY: The lessons learned
post-Madoff are that there is a
massive responsibility for the
depositary bank which ultimately
becomes responsible for invest-
ment decisions made by the fund
managers. When you look at the
fees charged by both parties,
they surely do not reflect the
reality of the responsibilities of
each party and of the indemni-
fications expected. That is the
main point we can learn from this
story. Whether the regulations
will be strengthened and will no
longer accept in-house adminis-
tration service, this remains to
be seen.
VAN HOUWELINGEN: In the Neth-
18
“It is essential
that fund
managers and
institutional
investors
accept to use
third party,
independent
administration”
Sebastien
Danloy, SGSS
erlands, and in particular in re-
spect of Dutch pension funds, we
have definitely seen a trend to-
wards increased regulation to en-
able the supervisors to gain more
insight into funds’ accounts. We
will see more regulation aimed
at ensuring similar oversight to
that seen in the UCITS context,
to protect the individual pension
premium payer. It could be that
independent administration and
audit will become mandatory,
but even now stakeholders will
typically ask for independent
auditing of a fund’s accounts.
4. How will increased regulatory
attention affect hedge funds’
activities in the region and
their investment operations
with more mainstream funds
such as UCITS?
DANLOY: Hedge funds are in
the radars of regulatory around
Europe. A general framework on
a global basis needs to be agreed
if we want to see any significant
changes in that area. It is not
so much the hedge funds itself
which are an issue in my view
but the fact that hedge fund
managers were not necessar-
ily regulated. This is the area in
which international coordination
and action is required.
VAN HOUWELINGEN: Given
today’s markets, it is gener-
ally accepted that many of the
traditional ‘leveraged’ hedge
funds will disappear. Regulators
ISJ Investor Services Journal
will demand total transparency
and that is difficult to obtain. On
top of that the risk appetite of
investors has obviously changed
significantly and therefore UCITS
funds will become more attractive
5. The FvGR pooling structure
has been an influential factor in
Luxembourg and the Nether-
lands. Have you seen increased
client demand for reporting
on underlying funds, and how
significant is the challenge in
providing this?
VAN HOUWELINGEN: There is in-
deed increased client demand for
and an attendant trend towards
more transparent reporting, with
clients starting to move away
from master trust unitisation.
Moreover, investment managers
are also driving this trend as they
seek more efficiencies through
the establishment of pools such
as FvGRs.
The challenges are two-fold.
Number one, technology: your
systems need to allow the admin-
istration of the securities at the
investment level, the pool level
and the participants level. Most
of the larger global custodians
now have the systems in place to
provide this level of administra-
tion.
Secondly, data – when it comes
to collating the data from all
investment managers, in particu-
lar the specialised investment
boutiques, the fact that these
managers earmark their invest-
ment information as confidential
may pose a challenge. Global
custodians like ourselves have
an advantage here as are seen as
independent and neutral.
One additional challenge that
will not go away is that the local
tax authorities in the different
markets involved will have to
recognize the tax transparent
status of the FvGRs. n
Next issue:
Custody
networks
6/4/09 14:51:11
 ISJ Investor Services Journal
Reinvesting the wheel
Cash collateral pools and their
reinvestment rarely escaped the
investment headlines last year. Two
lawsuits against Northern Trust – from
the University of Washington and BP -
based on the losses incurred on their
securities lending caught the eye. More
recently, it was reported that as much
as 90% of US pension plans have been
hit by valuation in the cash collateral
pools, causing some custodians to
impose redemption restrictions on the
underlying index funds.
Some custodians took cash as
collateral and invested it in their in-
house money market funds – which
could be arguably seen as a conflict of
interest. Should agent lenders be able
to earn additional fee-based income,
at their clients’ risk, by funnelling cash
into their own vehicles? At least some
of those funds, in turn, were invested in
Lehman Brothers or Lehman Brothers-
related paper, now worthless, or in other
‘toxic’ assets such as mortgage-backed
securities.
As a result, clients had to hope their
custodian would protect them from
unindemnified losses. For some it did
17-23 ISJ38 APR5.indd 19
The reinvestment of cash collateral
in securities lending has been
a mainstay of market debate,
finds Brian Bollen.
work - Northern Trust’s decision to help
its clients cost the bank USD515 million.
But the cash hit taken to protect client
wealth is probably worth it to protect its
reputation and its relationships.
But it is the providers rather than
the users of the service who are the
convenient scapegoats. Mark Payson,
managing director at Brown Brothers
Harriman, says: “In some programmes,
the focus was pushed too far away from
securities lending and towards securities
financing, which stresses the potential
proceeds from cash reinvestment.”
Securities lending is still a relatively
low-risk product if the right approach
is taken, he adds. “There may have been
a disconnect between the philosophies
of the agent and the beneficial owner
in some cases. Looking back, some
beneficial owners may wish they had
asked more questions, and reviewed the
acceptability of their securities lending
programme more often. Most beneficial
owners were not looking to be involved
in a high-risk strategy, but in some cases,
this was what resulted.”
After a rebate is paid to the broker for
the use of its cash, the spread between
19
Securities Lending
that rebate and what has been earned by
the investment of the cash represents the
client’s earnings.
Cash collateral and cash reinvestment
have been around since the inception of
securities lending, but many, if not most,
of the big issues arising from
the latter.
The important thing is to understand
the many options that are available
relating to the treatment of cash
collateral. A very conservative approach
will mean doing a government repo or
a time deposit with a highly reputable
bank (if such a creature can be deemed
to exist in this day and age), cutting
maturity and credit risk to an absolute
minimum. A more adventurous
approach might be to invest in a money
fund, a registered product or a separately
managed account with riskier guidelines,
creating maturity risk and raising
credit risk by introducing into the pool
assets from further down the credit
curve, such as GE commercial paper or
paper issued by a very small company.
The possibilities have been many and
various, limited only by the imagination
of the parties involved on the issuing
side of the equation and the risk appetite
(i.e. greed) on the investing side.
While the collateral investment
spectrum is broad, it is the areas of
maturity risk and credit risk that have
historically created the greatest problems
for the securities lending market. They
did so again last September. “Neither of
these is related to the BBH programme,”
Mark Payson is quick to point out.
“We are arguably one of the only
agent lenders not to have issues with
the challenges presented by collateral
reinvestment. We are on an island with a
6/4/09 14:51:12
 Securities Lending
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32
limited few and are happy to be on that
island.” John Donohue, chief executive
officer of Carne Group, advisers to the
asset management industry, describes
cash as the worst form of collateral,
while hailing Treasury bills as the ideal.
“One good lesson to be learned from
the financial crisis is that cash is not a
protected asset,” he says.
For Oliver Madden, technical sales,
securities lending, at RBC Dexia Investor
Services Trust, the overriding lesson
is that the market need to get back
to basics. “There needs to be a clear
understanding by every individual
participant in securities lending and cash
reinvestment of their own objectives
and their own risk/reward parameters,”
he says. “Those beneficial owners who
continue to accept cash collateral will
need to monitor the cash reinvestment
more closely in future.”
The underlying blame for what
happened – and don’t we all like to
point the finger of blame sometimes
- lies somewhere between the two
functions, comments Chris Oulton, chief
executive officer of Prime Rate Capital
Management in London. “Money
market funds are investment products,
not banking products, and inappropriate
portfolio construction by investing
in, for example, paper from a poorly
rated issuer that is already on credit
watch, would be beyond most fund
parameters. You hope your custodian
will hold the right mix of assets, but
institutional investors are assumed to
more sophisticated than their retail
counterparts, and they should do their
best to ensure the products they invest in
are fit for purpose.”
Some lenders in the marketplace
would recognise now that perhaps
they should have spent more time
on the supervision and management
of collateral reinvestment than they
actually did, adds Paul Wilson, global
head of client management and sales
for securities lending at JPMorgan.
“Since the events of last year we have
seen an increased level of interaction,
17-23 ISJ38 APR5.indd 20
engagement and supervision by many of
our clients, which we think is a healthy
development. We have seen a small
number of people leave the securities
lending programme, but we have also
seen a number of those subsequently
return to it. The industry did, after all,
hold up pretty well for the most part.
Most lenders came out of the Lehman
default reasonably unscathed and
together for those who want ed to exit,
being able to do so will be important
factors in deciding whether or not to
return.”
Here’s how it works. An agent
lender lends out USD1 billion of client
securities to a broker-dealer, takes
USD1bn cash as collateral and reinvests
that cash in a money market vehicle. At
“One good lesson
form the financial
crisis is that
cash is not a
protected asset”
John Donohue,
Carne Global
some point the broker-dealer wants to
return the securities, and receive its cash
back. In recent times the industry has
been challenged in the repayment of the
cash for two reasons.
One, some of the collateral
reinvestment has been into pools
containing Lehman Brothers commercial
paper, or collateralised mortgage
obligations, that have proved to be either
completely worthless or not paid back
dollar for dollar.
Two, the broker doesn’t yet want
to return the securities borrowed, but
the falls in market values of the pool in
which its cash has been reinvested mean
that a $1bn of collateral is suddenly
worth only $600m. When the lender
does need to generate liquidity to repay
the broker-dealer, there is a problem.
Even with assets where the credit is
20
ISJ Investor Services Journal
deemed to be still good, challenges arise
from the pricing perspective. An asset
that might be worth 100% if held to
maturity might be worth only 80% in
the event of a forced sale, undermining
the long-standing principal selling point
of money market funds: the belief that
they will never break the buck, that is
the net asset value of such a fund will
never be below 100%.
The impact upon securities lending
of even unrealised losses in collateral
pools cannot be underestimated. The
losses are not indemnified by agent
lenders and even ‘sophisticated’ investors
are beginning to grasp the reality that
there is, in the time-honoured cliché,
no such thing as a free lunch. “If
they didn’t fully understand the risks
before, money market participants
are now beginning to understand the
potential for losses,” says Mark Payson.
“Contractually beneficial owners have
always owned the risk associated with
collateral reinvestment; however, I think
what is coming into question is whether
they knew the suitability of where
that collateral was being reinvested in
relation to their own risk profile. While
lenders own the collateral risk, agents
also have a responsibility to educate
lenders on what those risks are.”
Even when there is no legal
obligation to step up to bail out lenders,
the question of the continuation of
profitable relationships suggests that
agent lenders would be well advised to
dig deep. Whatever an agent lender’s
decision, the issues impacting securities
lending collateral pools are in many
ways a microcosm of wider market
sentiment: risk has been severely
underpriced and the market is now
overreacting in the opposite direction.
In such a febrile atmosphere, the
likelihood is that owners will begin to
treat securities lending with a greater
deal of respect, and come to view it as an
asset management product rather than
as an adjunct to custody.
Wayne Burlingham, global head of
securities lending at HSBC Securities
6/4/09 14:51:12 GSL Su
 GSL Summit| Global
Securities
Lending

neW DaTe

Lending for Thursday,

Liquidity 14th May 2009
In parched markets, liquidity must be
widely sought, and securities lending
can be a vital source. Beneficial owners
(pension and insurance funds in particular)
can only understand the wider benefits of
this liquidity if they are fully engaged with
the lending process and understand the
potential, the risks, and have opportunity
to voice their concerns and views.
GSL invites readers to an informative
afternoon to discuss this topic along with
wider issues of transparency, risk and
returns at this crucial time.

DaTe
Thursday, 14th May 2009

LocaTion
Four Seasons Hotel, canary Wharf, London

1:30 PM
Registration/coffee

5:00 PM
Drinks Reception

The event is free of charge to attend

but by invitation only. Please contact
James@2ipartners.com or visit www.
GSL.tv for invitation request.
28

GSL
17-23Sum Lend4Liq
ISJ38 AD.indd
APR5.indd 21 28 05/04/2009 19:04
6/4/09 14:51:13
 Analyse This
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
Services in London, says lending should
extract the “full intrinsic value” of
securities but there should never be
capital at risk. It has caused the bank to
eschew cash collateral. “In specific cases
agent lenders may have been too focused
on just the extra revenue instead of the
increased, associated risk,” he says. “But
the pursuit of that extra revenue has left
a large number of their clients, rather
than themselves, sitting
on potential losses from cash
reinvestment. Moreover, many
lenders are now locked into custody
arrangements they cannot get out of
without crystallising further losses.”
He adds that a “pall” hangs over
the securities lending market. “Some
consultants have not helped by issuing
bulletins spooking many, warning them
to immediately stop lending unless
certain conditions are met. I believe
it would have been more appropriate
to take a more positive view, to advise
people to continue lending as long as
certain conditions are met.”
“It is not securities lending that was
the problem, but the reinvestment of the
cash collateral into poor quality assets.
If we lend UK gilts, we typically take
in UK gilts, safe assets [once again, this
writer would add, safe for the moment;
the failure of one gilt auction in
March - at a time when unprecedented
volumes of issue are in prospect – was
brushed off the UK authorities as a
technical issue, but it still registered
on the financial Richter scale, sending
shivers down many a spine]. And as we
comprehensively indemnify clients, if the
borrower goes bust, as Lehman Brothers
did, we simply replace the lost assets in
question. In many circumstances we
actually generate better returns than
agent lenders who take cash collateral,
i.e. it often isn’t even necessary to run
the additional risk. People are now
realising they have to stop chasing yield
and focus more on risk.” And in
the meantime, let the law suits - against
custodians and global accounting firms
– commence. n
17-23 ISJ38 APR5.indd 22
Analyse This:
SEPA today
Why won’t a minimal
approach to SEPA
work in the long-run?
Richard Davies,
director, global
payments, Logica
Despite the launch of the SEPA Credit
Transfers (SCT) scheme in January
2008, practical implementation remains
low, with just 1.9% of the total credit
transfer volume in the euro areas being
SCT transactions. The European Central
Bank (ECB) has therefore recently called
for a migration end date for SEPA Credit
Transfers and SEPA Direct Debits (SDD)
to be set to ensure that the full benefits
of SEPA are realised.
The next stage of implementation –
in the form of the SEPA Direct Debits is
due to kick off in November, alongside
the Payments Services Directive (PSD).
Banks are rapidly realising the need to
react and comply sooner rather than
later to both these initiatives.
With this deadline looming, many
banks are likely to adopt a minimal
compliance solution in the short-
term that simply ticks the boxes.
While understandable given the time
constraints, this will only go so far.
To be in a strong position to convert
all domestic payments to SEPA
22
ISJ Investor Services Journal
56
instruments, which the ECB is pushing
for, banks must look longer-term.
Banks are no strangers to updating
systems to accommodate new
regulations and standards. In the past,
they have been inclined to implement
tactical fixes to legacy systems. Today,
this strategy can lack foresight. Not only
does it increase the cost of payments
transformation, but it increases
operational risk, as these infrastructures
are not designed to cope with shifting
regulations like SEPA.
Banks looking to scale should use
“It is an opportune time
to invest in a modern
infrastructure”
their implementation of SEPA and the
PSD as the catalyst to revamp their
payments operations, considering the
short-, mid- and long-term future. It is
an opportune time to invest in a modern
infrastructure with the capability to
span regions, currencies and languages.
Forward-thinking banks that embrace
SEPA as part of their long-term strategy
should implement a single framework
that covers both credit transfers and
direct debits. Furthermore, with the
rules around SEPA likely to evolve over
time, it is important to have a stable
modern payments environment that can
effectively adapt with these changes.
There’s no question that the entire
payments industry is striving to meet
the PSD deadline. And while it’s a
slow-starter, SEPA uptake will increase,
especially as large corporates become
more aware of the value of rationalised
euro services and pressure banks into
providing them. It therefore promises
a significant impact on payments
revenues and can put banks in a more
competitive position. n
6/4/09 14:51:16
 Japanese Textile Stencil, 1900 — Mulberry paper with dye

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BHF-BANK is one of Germany’s most prestigious private banks dating back to 1854. C: Cornelia Keth
As an advisory, service and sales & trading bank, we offer our discerning clientele a T: +49 69 718 3738
comprehensive array of customised solutions. BHF-BANK combines the strengths of a F: +49 69 718 6050
private bank with a long track record of capital market competence. Trust, an individual E: cornelia.keth@bhf-bank.com
approach and impartiality - these qualities are at the very heart of the long-term C: Moritz Ostwald
guidance and advice we provide. Our bank’s activities are grouped within the divisions T: +49 69 718 6838
Asset Management & Financial Services, Financial Markets & Corporates and Private E: moritz.ostwald@bhf-bank.com
Banking. The bank’s longstanding experience in the German securities services market
A: Strahlenbergerstraße 45,
goes hand in hand with a corporate culture that values prompt acknowledgements and
63067 Offenbach a.Main
short decision-making channels. BHF-Bank offers tailor-made custody services to meet
its clients’ particular requirements. It’s reporting services include a comprehensive Germany
SWIFT reporting matrix as well as its Internet-based reporting tool cds@web. W: www.bhf-bank.com
Assets under Custody: EUR309 bn No of funds: 409

DnB NOR is the leading provider of Custody, Clearing and Remote Member Service in T: +47 22 94 92 95
Norway. DnB NOR offers a full range of securities settlement, Corporate Action and cash F: +47 22 48 28 46
management services for both foreign and domestic institutional clients. The bank Contact: Bente I. Hoem, Head of Global
has a strong commitment to the Custody business in Norway and the staff is highly Relations & Network
knowledgeable and experienced. In addition, DnB NOR provides a wide range of value- E: bente.hoem@dnbnor.no
added services for foreign clients such as Securities Lending, Income Collection, Proxy W:www.dnbnor.com
Voting, Tax Reclaim, and MIS reporting.
As the largest commercial bank in Norway, DnB NOR offers clients full services in
securities trading, registration, foreign exchange and Money Market.

Banking Securities Services provides award winning local and regional custody services For further information please contact
for investment professionals. We are proud to be the largest custodian provider in Lilla Juranyi, Global Head Custody
terms of assets and number of foreign clients in Central & Eastern Europe. ING has been at + 31 20 7979 435
providing Securities Services in CEE since 1994 and we will continue our ongoing pursuit or contact her by email:
of excellence through new technology. Innovation and client focus are the key drivers Lilla.Juranyi@mail.ing.nl
to service our clients the best way.
Other activities of ING Wholesale Banking Securities Services are Paying Agency Services
and web-based management of employee stock option & share plans.
ING is your local partner in: Belgium, Bulgaria, Czech Republic, Hungary, Poland,
Romania, Russia, Slovak Republic and Ukraine.

Intesa Sanpaolo’s Transaction Services include : Piazza della Scala 6

• Sub Custody, Derivatives and Remote Membership Clearing
20121 Milan, Italy
• Global Custody and Depository Bank for mutual funds, pension funds, real
T: +39 02 8794 2466
estate funds, private equity funds and hedge funds
• Fund Administration for mutual funds, pension funds, real estate funds, F: +39 02 8794 1519
private equity funds and hedge funds W: intesasanpaolo.com
• Paying Agent for foreign funds and sicavs C: Riccardo Lamanna
• Cash and Payment services like swift to checks, mass payments, checks and E: riccardo.lamanna@
cash letters intesasanpaolo.com

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Journal ISJDirectory
ISJ DirectoryofofServices
Services
Nordea is the leading financial services group in the Nordic and Baltic region and operates
through three business areas: Nordic Banking, Private Banking and Institutional &
International Banking. Nordea is the leading custody services provider in the region. Nordea
provides high quality, tailor-made custody services for local and foreign investors dealing with Contact:
Nordic and Baltic securities. Due to the unique history of being formed from four established Nina Groth
banks, Nordea is the only Nordic custody provider with strong local presence and expertise in all Head of Sub-custody and Clearing
four markets. Nordea combines Nordic competence with local expertise, and has proven ability Tel: +45 3333 6124
to deliver high quality services that meet both clients’ and each local market’s requirements. E-mail: nina.groth@nordea.com
Leading Nordic custodian: Critical mass and resources available; deep local experience and
active involvement in each Nordic market; Complete operational capabilities and best-fit
systems developed in each Nordic market; Proven ability to deliver high-quality service in all
Nordic markets; Excellent connection with key players in all Nordic Markets; Extensive product
and service offering; Your single point of entry to the whole Nordic region.

www.rbcdexia.com
RBC Dexia Investor Services offers a complete range of investor services to institutions T: +44 (0) 20 7653 4096
worldwide. Our unique offshore and onshore solutions, combined with the expertise F: +44 (0) 20 7248 3946
of our 5,500 professionals in 16 markets, help clients grow their business and sustain Contact: Antony Johnson
enhanced performance through efficiency improvements and robust risk management Head, Sales & Relationship Management
processes. Equally-own by RBC and Dexia, the company ranks among the world’s top 10 E: antony.johnson@rbcdexia.com
global custodians with USD 1.9 trillion in client assets under administration. Address: 71 Queen Victoria Street,
London, EC4V 4DE, UK

Santander is Spain’s leading financial institution and the largest bank in the euro zone
by market capitalization. Our commitment and contribution to the securities industry is
T: Europe: (34) 91 2893932 / 28
well established after more than a century of providing services in this field.
T: USA: (1212) 350 39 02
Santander’s cutting edge technology enables it to offer a comprehensive array of
W: santanderglobal.com
innovative services in a broad range of markets. Santander currently has full local
E: globalsecurities@
capabilities in Iberian and Latin American markets along with a franchised presence in
gruposantander.com
many others. Santander`s experience and product range ensures that every aspect of
the securities business is fully contemplated.

Financial Asset Services is the custody and investments-servicing division of Standard

Bank, providing a unique suite of services to sophisticated investors in South Africa and A:Standard Bank
eight sub-Saharan markets. Financial Asset Services
3rd Floor
Standard Bank has assets under custody to the value of ZAR1.56 trillion and an overall 25 Sauer Street
market share of approximately 40%. Johannesburg 2107
T: +2711 636 6615
Standard Bank’s unique selling point lies in its consultative approach to E: adam.bateman@standardbank.co.za
relationships combined with the bank’s commitment to custody and investment W: www.standardbank.co.za
administration services.

SEB is the leading provider of securities services in the Nordic and Baltic area. We
are committed to custody and clearing processes for the wholesale market. We hold
T: +46 8 763 53 04
securities worth over 560 bn EUR and provide services in more that 75 markets, 10 of
F: +46 8 763 69 30
them under the SEB name (Sweden, Norway, Finland, Denmark, Luxembourg, Germany,
C: Goran Fors, Global Head
Estonia, Latvia, Lithuania and Ukraine).
of Custody Services
We offer a full range of securities services including corporate action and information
E: goran.fors@seb.se
services, securities lending and services to remote members of the Nordic and Baltic
W: www.seb.se
stock exchanges. We continuously develop new products in connection with clients and
partners to ensure we deliver the high-quality products our clients demand. We always
strive to make the processes more efficient. With a history of over 150 years in the
securities industry; we know the market and our clients well.

Société Générale Securities Services offers institutional investors, asset managers and Sébastien Danloy
financial intermediaries a comprehensive range of financial securities services: custody, Global Head of Sales,
clearing & trustee services, fund administration, asset servicing and transfer agency. Investor Services
SGSS currently ranks 3rd European custodian and 9th worldwide custodian (Source: Société Générale Securities Services
Globalcustody.net) with EUR 2,580* billion in assets held and valuates 4,354* funds T: +33 (0)1 41 42 98 65
representing assets of EUR 405* billion (as of June 2007). E: sebastien.danloy@socgen.com
W: www.sg-securities-services.com

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Standard Chartered leading the way in Asia, Africa and the Middle East. Standard
C: Neil Daswani,
Chartered has a history of over 150 years in banking and is in many of the world’s fastest-
Global Head, Securities Services
growing markets with an extensive global network of over 1,200 branches (including
T: +65 6517 0022
subsidiaries, associates and joint ventures) in over 50 countries in the Asia Pacific Region,
E:
South Asia, the Middle East, Africa, the United Kingdom and the Americas. As one of
Neil.Daswani@sg.
Asia’s leading custodians, Standard Chartered has an impressive track record across the
standardchartered.com
16 Asian markets in which it provides securities services. It serves global, regional and
W: www.standardchartered.com
local custodians and broker-dealers, as well as local and regional fund managers. The
Bank plays a key role in promoting the development of these markets and keeping the
international investor community informed of industry developments across the region.

Swedbank provides client-focused custody services to domestic and international

securities lending (including auto-borrow facilities), derivative clearing services, proxy
voting, full corporate actions and income service. Flexibility is an important aspect of
Swedbanks products and services. Our dedicated Client Relations Managers and Account T: +46 8 5859 1800
Managers are focused on personalized processing and reporting solutions. F: +46 8 7237 147
Other Features: C: Neal Meacham, Head of Custody
• ISO9001:2000 quality certification. E: neal.meacham@swedbank.com
• Swedbank Markets Online (SMO) internet information and reporting tool for A: Stockholm SE 105 34 Sweden
Custody and Securities Lending.
• Nordic Custody alliance with DnB NOR (Norway), OKO Bank (Finland) and
Amagerbanken (Denmark) to offer regional custody product.
Institutional Assets under Custody: USD 70 billion

Data Services
Market Data & Analytics provides high-value real-time market data, indices and back Avox
office services. Information from diverse sources are provided to its customers, tailored Redwither Tower
to their specific information needs. Accuracy and reliability are ensured by collecting Redwither Business Park
the data from the Group’s own trading platforms, such as Xetra® and Eurex® and Wrexham, LL13 9XT
cooperation partners like STOXX Ltd. and the Irish Stock Exchange. Avox®, a majority- United Kingdom
owned subsidiary, validates, corrects, enriches and maintains
business entity data. With an operational model, unique in the industry, Avox® enables T: +44 (1978) 661 813
clients to comply with regulatory requirements and to achieve a holistic view of the risk F: +44 (1978) 661 668
exposure towards a client. W: www.avox.info

Interactive Data Corporation (NYSE: IDC) is a leading global provider of financial market www.interactivedata.com
data, analytics and related services to financial institutions, active traders and individual T: 020 7825 7800
investors. The Company’s businesses supply real-time market data, time-sensitive F: 020 7608 3514
pricing, evaluations and reference data for millions of securities traded around the Brendan Beith
world, including hard-to-value instruments. Many of the world’s best-known financial European Sales Director
service and software companies subscribe to the Company’s services in support of their eu-info@interactivedata.com
trading, analysis, portfolio management and valuation activities. Through its businesses, Fitzroy House
Interactive Data Pricing and Reference Data, Interactive Data Real-Time Services, 13-17 Epworth Street
Interactive Data Fixed Income Analytics, and eSignal, the Company has approximately London EC2A 4DL UK
2,300 employees in offices located throughout North America, Europe, Asia and
Australia.

SmartCo is a leading provider of data management solutions for the financial industry. For further information: www.smartco.fr
SmartCo’s software, Smart Financial Data Hub, covers all the data area, including or info@smartco.fr
financial instruments, market data, third parties, funds, transactions, and provides full
connectivity, a powerful and user friendly front-end, traceability, quality control, data SmartCo
enrichment and customisable workflow. 37 rue de Liège
Our solutions are based on SmartPlanet, an innovative technology focused on data 75008 Paris
management, and able to meet evolving business requirements. France
SmartCo offers to its customers the ability to respond in the fastest way to regulatory and T: + 33 1 58 22 29 60
business changes. E: info@smartco.fr
W: www.smartco.fr

Fund Administration
For more information visit our website:
Established in 2002, IMFC Fund Services B.V. is a boutique hedge fund administrator www.imfcfundservices.com
and a trustee with its offices in Amsterdam and Sydney. IMFC offers third parties
administration and related services to all type of onshore and offshore funds combining www.imfcfundservices.com
high quality, independency, technology, timely calculation with flexibility, experience, t +31.20.644.4558
f +31.20.644.2735
custom-made solutions and competitive rates. Our services include: fund set-up and
Mrs. Consuelo Nardon
corporate services, NAV calculation and other accounting services, R&T agent and other
e: consuelo.nardon@imfc.nl
investors and compliance services.
Rivierstaete Building, Amsteldijk 166,
1079 LH Amsterdam, Netherlands

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ISJ Investor Services
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Services
C: William J. Salus
A: PNC Global Investment Servicing,
301 Bellevue Parkway
Wilmington, DE 19809 USA
As one of the world’s leading third-party fund administrators, PNC Global Investment T: 302.791.2000
Servicing has over 35 years of experience delivering personalised solutions to asset E: information@pncgis.com
managers, distributors, and financial advisors worldwide. PNC services an international C: Fergus McKeon
client base from service centres in the United States, Luxembourg, Ireland and Poland, A: PNC Global Investment Servicing
additional offices in London and New York, and a presence in the Cayman Islands. Riverside Two
Sir John Rogerson’s Quay, Dublin 2,
Ireland
T: +353-1-790-3500
E: information@pncgis.com

Société Générale Securities Services offers institutional investors, asset

managers and financial intermediaries a comprehensive range of financial securities Sébastien Danloy
services: Clearing, Liquidity Management, Custody and Trustee, Fund Administration, Global Head of Sales
Asset Servicing, Fund Distribution Services and Issuer Services. SGSS currently ranks 3rd Société Générale Securities Services
European custodian and 7th worldwide T: +33 (0)1 41 42 98 65
custodian (Source: Globalcustody.net) with EUR 2,731* billion in assets held and valuates E: sebastien.danloy@socgen.com
5,158* funds representing assets of EUR 499* billion (at end March 2008). W: www.sg-securities-services.com

Swiss Financial Services

Drawing upon an extensive track record of proficiency, dependability and (Ireland) Ltd.
responsiveness, Swiss Financial Services acts as administrator as well as registrar and Block 4B,Cleaboy Business Park,
transfer agent of funds investing in a broad range of financial instruments. These Old Kilmeaden Road,
include futures, foreign exchange, equities, options, bonds and other funds. Waterford, Ireland
T: +353 51 351180
We perform accounting and administration services for diverse fund types domiciled F: +353 51 871595
in, but not limited to, the United States, Bahamas, Cayman Islands, B.V.I. and Ireland.
Adrian Maher
E: amaher@swiss-financial.ie

Luxembourg: Jean-Paul Gennari,

tel. +352-44-1010 1
Fund Services is a dedicated fund administrator providing customized and flexible services for Switzerland: Markus Steiner,
traditional and alternative investments. tel. +41-61-288 4910
Our comprehensive range of services for investment funds includes fund set-up, registration and W: www.ubs.com/fundservices
support around the world, fund accounting, NAV calculation, risk control and reporting. We have C: Andre Valente
practical experience with registering funds in 28 jurisdictions. T: + 41 61 288 6269
We provide a flexible offering from the full range of services, including Private Labelling, to selected E: andre.valente@ubs.com
functions. Through our leading fund administration architecture, multi-source pricing and powerful A:UBS Global Asset Management -
compliance tools, we offer a tailored, cost effective service. www.ubs.com/fundservices Fund Services, Brunngässlein 12,
PO Box CH-4002 Basel, Switzerland

Hedge Fund Administration

Apex Fund Services Ltd is a global hedge fund administration solution for hedge funds C: Peter Hughes
and private equity clients located in 12 separate jurisdictions across the globe. The Group Managing Director
company uses the software solution, PFS PAXUS, which is a fully integrated hedge fund T: +1 441-292-2739
accounting system combined with web-based reporting to allow clients and investors F:+1 441-292-1884
to access their information 24/7 securely online. We will tailor all solutions to meet E: peter@apex.bm
your needs and our continuing focus on the quality of service and the relationship with John Bohan
each and individual client ensures that we retain our ethos of providing a personalized Group Manager of Operations
service rather than a generic solution. T: +353 21 4633366
Highly qualified and experienced staff, mirrored with top tier technology and F: +353 21 4633377
competitive fee structures make Apex Fund Services Ltd the clear choice for your fund E: John@apexfunds.ie
administration needs.

Custom House Administration &

Custom House, which is one of the world’s largest independent alternative investment and
Corporate Services Limited
hedge fund administrators, was awarded a SAS 70 Type I in May 2007 and a SAS 70 Type II in
A: 25 Eden Quay, Dublin 1, Ireland
December 2007.
T: +(353) 1 878 0807
Custom House offers a round-the-world, round-the-clock service from its office in Dublin and F: +(353) 1 878 0827
representative offices in Chicago and Singapore, enabling it to provide, not only complete C: dermot.butler@
global administration services, but also the ability to produce daily dealing NAVs. customhousegroup.com
Custom House is authorised by the Irish Financial Regulator under Section 10 of the C: david.blair@
Investment Intermediaries Act, 1995, which authorisation does not extend to the Chicago customhousegroup.com
and Singapore representative offices. www.customhousegroup.com

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Cayman Islands: Darren Stainrod,
Fund Services holds a leading position in the area of hedge fund administration tel. +1-345-914 1076
with specialized teams around the world. We offer a complete range of services Eire: Don McClean, T: +353-1-436 3636
including accounting, NAV calculation, shareholder services, banking and credit US: Concetta Mastrangelo,
facilities. tel. +1-212-882 5523
With specialist expertise in both single manager and fund of hedge fund Hong Kong: Michelle Chua,
administration, services can be provided for both onshore and offshore funds. tel. +852-3712 2387
W: www.ubs.com/fundservices
Through our comprehensive range of services and products, leading edge
C: Darren Stainrod, T: ++1-345-914 1076
technology platforms and superior client service, we work in partnership to offer E: Darren.stainrod@ubs.com
the solutions you need. A: UBS Fund Services (Cayman) Ltd, PO
Box 852 GT, Grand Cayman, Cayman Is

International Finance Centres

The British Virgin Islands has created a progressive and transparent environment for the
establishment and regulation of mutual/hedge funds and their functionaries. By the end British Virgin Islands
of Q3 2006 the BVI had recognised or registered more than 4,000 funds, and licensed International Finance Centre
some 700 managers and administrators, making the BVI a leading domicile of choice for Haycraft Building
investment business. Benefits of conducting investment business in the BVI include: 1 Pasea Estate
• Fast-track registration and licensing system - funds can be registered in a few days. Road Town
• Presence of qualified, experienced legal, accounting & administration practitioners. Tortola
• A well-developed corporate professional infrastructure. British Virgin Islands
• Modern, robust and cost-effective regulatory and corporate regimes. T: +1 284 494 1509
• BVI private and professional funds fall outside the scope of EU Savings taxation Directive. F: +1 284 494 1260
• Segregated Portfolio Companies - also known as Protected Cell Companies - can now be W: www.bviifc.gov.vg
formed as mutual funds under the BVI Business Companies Act 2004.

Payments & Settlements

VocaLink is the payment transaction specialist. Trusted by the world’s top banks VocaLink
our automated payment system processes over 90 million transactions per day. The Drake House
VocaLink switching platform powers the world’s busiest ATM network and provides Homestead Road
end-to-end management of Europe’s largest ATM estate, while the Real-Time Rickmansworth
Payments platform provides the central infrastructure for the UK Faster Payments Hertfordshire
service. The VocaLink EuroCSM delivers reach for our clients throughout the SEPA WD3 1FX
and beyond with a range of value-added services that leverage our know-how and
technical capabilities. VocaLink is the partner of choice internationally, working T: +44(0)870 1650019
with BGC to process Sweden’s automated payments. F: info@vocalink.com
Find out how we can help your business at www.vocalink.com W: www.vocalink.com

Prime Brokerage
Newedge Global Prime Brokerage Group is a global, multi-disciplinary, solution-
providing team dedicated to delivering superior services to alternative investment Philippe Teilhard de Chardin,
industry participants including hedge funds, commodity trading advisors (CTAs), Global Head of Prime Brokerage
fund of hedge funds, family offices, and institutional investors (insurance companies, T +44 20 7676 8536
banks and pension funds). The Newedge prime brokerage team offers a global range Vincent Tournant, Head of Business
of brokerage services covering a wide range of asset classes including equities, Development T +44 20 7676 8171
bonds, currencies, commodities, and their related listed and OTC derivative products. Duncan Crawford, Head of Capital
We also offer an innovative portfolio-based cross-margining solution, a dedicated Introductions T +44 20 7676 8504
account management desk, hedge fund start up services, quantitative information on E: pbinfo@newedgegroup.com
the hedge fund industry, capital introductions services, and recently prime brokerage www.newedgegroup.com/primebrokerage
services to Sharia compliant hedge funds. Newedge is wholly owned by Calyon and
Société Générale, with both companies having 50% ownership.

Securities Lending
Data Explorers (www.dataexplorers.com), based in New York and London, is the UK: 2 Seething Lane, London, EC3N 4AT
world’s most complete resource for data, analysis and insight into securities T +44 (0) 20 7264 7600,
lending and short selling. The company’s proprietary data gives an unrivalled, F +44 (0)20 7392 4004
comprehensive view on share lending and short-selling activity. With data sourced US: 75 Rockefeller Plaza, 19th Floor
directly from securities lending desks of over 100 of the top lending firms and New York, 10019, USA
representing most of the global securities lending market, Data Explorers has built T +1 212 710 2210 F + 1 212 710 2212
a reputation with leading financial institutions as the source for short intelligence Julian Pittam T +44 (0) 207 264 7616
that informs their decision-making and their coverage of market sectors and E:julian.pittam@dataexplorers.com
companies. Please visit our Blog: dataexplorers.com/news, Twitter, twitter.com/ New York: Ken Read T +212 710 2210
dataexplorers, Video dataexplorers.com/daily-briefing and LinkedIn linkedin. E: kenneth.read@dataexplorers.com
www.dataexplorers.com
com/companies/data-explorers sites.
www.equilend.com
EquiLend is a leading provider of trading services for the securities finance EquiLend Europe Ltd.
industry. EquiLend facilitates straight-through processing by using a common 14 Devonshire Square
standards-based protocol and infrastructure, which automates formerly manual London, EC2M 4TE
trading processes. Used by borrowers and lenders throughout the world, the +44 (0) 207 426 4426
T: UK- +44 (0)20 7743 9510
EquiLend platform allows for greater efficiency and enables firms to scale their C: Michelle Lindenberger
business globally. Using EquiLend’s complete end-to-end services, including pre- E: michelle.lindenberger@equilend.com
and post-trade, reduces the risk of potential errors. The platform eliminates the A: 17 State Street, 9th Floor
need to maintain costly point-to-point connections while allowing firms to drive New York, NY, 10004
T: US- +1 212 901 2224
down unit costs, allowing firms to expand business, move into different markets, C: Michelle Lindenberger
increase trading volumes, all without additional spend. This makes the EquiLend E: michelle.lindenberger@equilend.com
platform a cost-efficient choice for all institutions, regardless of size. W: www.equilend.com

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Services
eSecLending is a full service securities lending agent and administrator of
customized securities lending programs. Their program has been adopted by many of
the world’s largest and most sophisticated asset gatherers including pension funds, T: US- +1 617 204 4500
mutual funds, investment managers and insurance companies. They are a third party T: UK- +44 (0)20 7469 6000
industry specialist providing lenders with customized programs, high touch client C: Christopher Jaynes
service, comprehensive risk management, and superior risk adjusted returns. The E: info@eseclending.com
firm takes a highly consultative approach with their clients by structuring separate, W: www.eseclending.com
non-pooled programs and utilizing a competitive auction to determine the optimal A: 175 Federal Street, 11th FL, Boston, MA
route to market for their clients’ lendable assets. Having built their business to 02110, US
incorporate investment practices such as the use of specialists, multiple-managers,
unbundling, price transparency, and competition, their approach ensures best A: 1st Floor, 10 King William Street,
execution and also provides clients with greater control over their programs, allowing London EC4N 7TW, UK
them to more effectively monitor and mitigate risks and counterparty relationships.

Eurex is one of the largest derivatives exchanges and the leading clearing house
in Europe. Wherever you are located, we provide you with access to the benchmark
futures and options market for European derivatives. Eurex also offers short term
W: www.eurexseclend.com
funding products, such as Eurex Repo. Eurex Repo is among the forerunners in
T: +41 58 854 2066
providing integrated trading and clearing for repo transactions. Eurex’s latest F: +41 58 854 2455
innovative marketplace is called Eurex SecLend. E: info@eurexseclend.com
Eurex SecLend. Europe’s leading investment banks participate as borrowers Eurex Zurich Ltd., Selnaustrasse
in the Eurex SecLend marketplace, acting as principal brokers, dealers and 30, 8021 Zurich, Switzerland
intermediaries. They all benefit from Eurex’s leading state-of-the-art trading and
processing services. For Eurex, service and technology innovation is not just a
buzzword. New trends are being transformed into inventions through the adoption
of advanced trading practices. Find out more on www.eurexseclend.com.

FINACE® is the only fully integrated solution today which supports the future T: +41 (0)44 298 92 00
business model within the area of Securities Finance and Collateral Management. F: +41 (0)44 298 93 00
The architecture of FINACE® is based on a stable, leading edge technology A: COMIT AG, Pflanzschulstrasse 7,
platform, which was developed with performance and robustness as the focus of CH-8004 Zürich, Switzerland
design. With flexibility at its core, customer-driven extensions and modifications W: www.finacesolution.com
can be quickly and easily applied to the standard component set. www.comit.ch

JPMorgan’s Securities Lending program is unparalleled due in no small part to New York: William Smith
T: 212-623-5664
the Firm’s breadth of capability, financial strength, professional expertise and
E: william.z.smith@jpmorgan.com
seamless operations. Our program enables investors to access a broad spectrum of
London: Michael Fox
lending markets, with a diverse borrower base, offering a broad indemnification T: 44 207 742 0256
against borrower default, while achieving very competitive bids for their E: michael.uk.fox@jpmorgan.com
securities - all of this in an environment designed not to compromise the activities Sydney: David Brown
of their fund managers. As one of the founding members of EquiLend, a global T: (61-2)92504606
automated platform for borrowers and lenders, JPMorgan is at the forefront E: david.ldn.brown@jpmorgan.com
of technology and is ideally placed given its integrated lending, custody and W: www.jpmorgan.com/wss
accounting platforms.

Santander is the only Spanish financial institution with a team exclusively

dedicated to securities finance & with the purchase of Abbey in 2004 has W: www.gruposantander.com
expanded its capacity on a Global basis with trading teams in London (UK) & T: (3491) 289 39 42/54
Connecticut (USA). E: securitieslending@
gruposantander.com
Santander’s leading local capabilities in Spain, Portugal, UK, USA & Latin
America, along with its solid balance sheet & combined with the state-of-the-art
technology, provides its clients with the broadest range of solutions in securities
lending & financing, including availability across all assets classes, as well as
access to uncommon emerging markets.

Around the world, securities financing is managed on SunGard’s Email: securities.finance@

proven solutions for international and U.S. domestic securities lending and sungard.com
repo for over 250 clients. Through our Loanet, Global One, Martini and Astec Contact:
Analytics products and services, we provide comprehensive business solutions EMEA: +44 (0) 20 8081 2779
and information with worldwide reach for equities or fixed income securities America’s: +1 (646) 445-1179
financing. These solutions – all in an integrated, exception-based processing Asia Pacific: + 62276400
architecture – includes order routing, pre-trade analytics, trading, position Visit: www.sungard.com/
management, operations, accounting, settlement and reconciliation. securitiesfinance

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 ISJ Directory
Technologyof Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

BI-SAM is a leading provider of analytics software, client reporting and data

management solutions to the investment management community.
Our integrated and innovative solutions have already been adopted by many A: BI-SAM Ltd
renowned asset managers in France, Belgium, Luxembourg, UK, Hong Kong and 1 Cornhill
Singapore who have assets under management ranging from 10 to 450 billion Euros. London EC3V 3ND
The B-One suite of products covers: performance measurement, performance T: +44 (0)20 3008 5834
attribution (equities, balanced and fixed income), risk attribution (ex-post and ex- F: + 44 (0)20 3008 5831
ante), as well as multi-lingual client reporting and factsheets. This suite of products E: marketing@bi-sam.com
can be used either as stand-alone applications or ASP hosted solutions. W: www.bi-sam.com
The Company has approximately 45 employees in offices located in Europe (Paris,
London, Luxembourg). Offices in Asia and North America are under consideration.
The Company is headquartered in Paris.

DST International is the world’s premier vendor of technology solutions to the global investment T: UK +44 (0)20 8390 5000
management community with over 700 clients in 55 countries, and 1500 employees in 19 of the Boston +1 617 482 8800
world’s leading financial centres. Our wide range of asset management solutions meet the needs of Hong Kong +85 225 812 880
fund managers, dealers, settlement staff, custodians and record keepers operating as international F: +44 (0)20 8390 7000
asset managers; from front office simulation, opinion management and modelling functions, E: info@dstintl.com
through data management, dealing and settlement to custody and corporate actions. The suite of A: DST House, St Mark’s Hill, Surbiton,
products can be used either as stand-alone applications or brought together in flexible combinations Surrey, KT6 4QD
according to specific needs. W: www.dstinternational.com

Eagle Investment Systems LLC is a global provider of financial services technology,

serving the world’s leading financial institutions. Eagle’s Web-based systems support W: www.eagleinvsys.com
the complex requirements of firms of any size including institutional investment T: +44 (0) 20 7163 5700
managers, mutual funds, hedge funds, brokers, public funds, plan sponsors, and F: +44 (0) 20 7163 5701
insurance companies. Eagle is committed to providing enterprise-wide, leading-edge A: The Bank of New York Mellon
technology and professional services for investment accounting, data management, and Financial Centre
performance measurement. Eagle’s product suite is offered as an installed application or 160 Queen Victoria Street
can be hosted via Eagle ACCESS, Eagle’s application service provider. Eagle Investment London EC4V 4LA
Systems LLC is a division of The Bank of New York Mellon Corporation. To learn more
about Eagle’s solutions, contact sales@eagleinvsys.com or visit www.eagleinvsys.com.

Financial Tradeware provides integrated solutions for medium to small sized Investment
Management firms, Fund Managers and Hedge Funds, covering the full trade life cycle. W: www.f-tradeware.com
It is part of the Dharma Group of companies and benefits from the joint contributions T: +44 (0)20 7493 2773
and experiences within the group of market traders, business analysts, financial services F: +44 (0)20 7495 4858
professionals and skilled Microsoft Certified programmers. The company has developed a C: GrahamBright
suite of applications that integrate and Straight Through Process (STP) real-time trading, E: info@f-tradeware.com
back office administration, accounting and compliance. Ultra.net®, S-Messenger® and A: 31 Dover Street
H-Fund® arwe the company’s flagship products all based on Microsoft.NET infrastructure. London W1S 4ND UK
The company also offers a Member Concentrator for hosted SWIFT connectivity and Member
Administered Closed User Group (MA-CUG) services for Corporates and Hedge funds.

Isis Financial Systems provides mission critical investment management software and
services to many large and small companies. Our customers perform a broad range of
functions including fund accounting, derivative and hedge funds, wealth management, Contact:
and pension and endowments, etc…. Our integrated solution services the front, middle, Isis Financial Systems
and back offices of these companies with software that accommodates most any security 14 Felton Street
type. Built on a contemporary three tiered architecture our application helps financial Waltham, MA 02453
companies improve operating efficiencies, increase accuracy and reliability and improve Sales@IsisFS.com
customer service. (00-1) 781-209-0262
IsisFS has the experience and IMS has the tools to improve your operations and save you
money.

GL TRADE is your global financial software solutions company, operating in over 50

countries and serving 1,600 clients. We are the leading provider of multi asset front to www.gltrade.com
back solutions, connectivity and information services. We deliver trading solutions that
ensure our clients success on securities, listed derivatives, commodities, fixed income GL TRADE
and foreign exchange. Cheapside House
Dedicated to post trade securities operations, GL RIMS is your comprehensive real time 134-147 Cheapside
securities post execution processing solution, covering middle office, settlement and EC2V 6BJ London UK
accounting requirements. Its wide use of automation enables global capital markets Tel: +44 207 665 6200
organisation to achieve maximum STP. It is a flexible, highly scalable and easy to install Email: marketing@gltrade.com
platform with a new Service Oriented Architecture feature that allows smooth and
efficient connections with other third parties within a company.

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 ISJ Investor
ISJ Investor Services
Services Journal
Journal ISJDirectory
ISJ DirectoryofofServices
Services

A:IGEFI Group Sàrl - 7, Rue des

IGEFI is the foremost provider of software solutions for international fund promoters, Primeurs,
third-party service providers and fund managers. Its prestigious client-base is testimony L-2361 Strassen
to our commitment, service and quality with more than 200 expert staff supporting T: +352 26 44 211
clients from seven offices worldwide including Bangalore, Boston, Frankfurt, Geneva, F: +352 26 44 21 44
London, Luxembourg and Paris. MultiFonds is operational in more than 20 countries E: marketing@igefi.com
worldwide and support investment funds assets in excess of US$ 2 trillion. MultiFonds W: www.igefi.com
Fund Accounting and MultiFonds Transfer Agency are developed on a “one system-one C: Mr. Jesper Steiness - Head of
database” philosophy and provide significant advantages including reduced overhead Business Development
and IT support costs and single look and feel reporting for global clients. Europe & Asia
E: jesper.steiness@igefi.com

For more information on Information

Mosaic, please visit our website at
Information Mosaic is a global provider of advanced custody, corporate actions and wealth www.informationmosaic.com
Global:
management solutions to the global securities industry. Information Mosaic’s business
emullan@informationmosaic.com,
professionals leverage decades of financial industry expertise and technical knowledge
US:
to deliver complex projects on time and within budget. Since inception, the company emadigan@informationmosaic.com
has utilized the most modern technology to develop solutions to run on a scalable, Europe:
single platform. Today, Information Mosaic supports clients from offices in Boston, aleyder@informationmosaic.com
Dublin, London, Luxembourg, New York and Singapore. Currently, six of the top 10 global Asia:
custodians deploy Information Mosaic solutions worldwide. djennings@informationmosaic.com
General Enquires:
jflett@informationmosaic.com

For more than a decade, administrators, managers, and advisors have relied
on KOGER for dependable software tools backed by extensive industry T: 001-201-291-7747
experience and expertise. Now, for those who want to reduce costs and streamline F: 001-201-291-7808
business processes, Koger offers Fully Integrated Fund C: Mr Ras Sipko
Administrator, a vertically integrated suite serving the back-office software needs of the E: ras@kogerusa.com
fund industry. KOGER USA
Fully Integrated Fund Administrator consists of three core programs: 12 Route 17 North
~ NTAS, the New Transfer-agency System Suite 111
~ E*TAS, Electronic Transfer Agency System Paramus
New Jersey, NJ 07652, USA
~ GRID, Global Reach Interface Daemon
W: www.kogerusa.com
Other programs, such as PTAS, KIT, and KORS available separately, complement the core
competency of Fully Integrated Fund Administrator.

Misys provides integrated, comprehensive solutions that deliver significant results to

over 1,200 financial institutions globally. Our buyside solutions help asset servicers,
asset managers and hedge funds handle the latest complex products, streamline
processes, reduce costs and improve STP. Misys Summit is our award winning, www.misys.com
multi-asset class solution that boasts 18 years OTC derivatives market expertise. tcm.marketing@misys.com
With extensive OTC buyside coverage and the market leading structured products
module, Misys Summit delivers the solution you need for handling the end to end
process for OTC. We also provide a customisable ASP service for fast implementation
and lower costs.

Building on over twenty years of experience in capital markets and cross-asset software
solutions, Murex introduces Mx Asset Manager - a unique cross currency, cross asset fund
management solution capable of handling the full range of products, from plain vanilla to C: Hélène Desbiez
the most complex derivative products. Business Development Manager
Coupled with a high degree of flexibility and customization, Mx Asset Manager T: +33 1 44 05 32 00
features a multifaceted design catering to the needs of both service providers E: helene.desbiez@murex.com
(prime brokers, administrators, asset servicing providers) and direct clients (portfolio W: www.murex.com
managers for mutual, pension or hedge funds, insurance companies).
With so many new challenges presented to buy-side managers when integrating
increasingly-complex derivatives into their portfolios and funds, Mx Asset Manager
represents a strong and reliable ally for dynamic position keeping and multi-dimensional
risk management in a thriving market.

Odyssey Financial Technologies is an industry leader in the global provision of wealth

and asset management solutions and services to the Private Banking, Mass Affluent and
London Office:
Retail Banks as well as Institutional and Fund Managers. Over 200 financial institutions Martin House
in more than 30 countries have chosen Odyssey solutions. Odyssey focuses on providing 5 Martin Lane
a comprehensive range of components for portfolio management (PMS), advisory London EC4R 0DP U.K.
process, customer relationship (CRM), compliance, risk, analytics and Enterprise Data
Management (EDM). The components are deployed on a single scalable wealth and asset T: +44 (0)20 7621 5800
management platform, facilitating the enterprise-wide implementation of solutions F: +44 (0)20 7621 5899
and data management. Founded in Luxembourg in 1995, Odyssey today has offices in
the key financial centers, including London, New York, Singapore, Zurich, Frankfurt, E: info@odyssey-group.com
Brussels, Geneva, Madrid, Toronto and Tokyo. Odyssey’s operational head office and main W: www.odyssey-group.com
development centre is located in Lausanne, Switzerland. Throughout this knowledgeable
network Odyssey employs over 600 professionals.

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 ISJ Directory of Services ISJISJInvestor
InvestorServices
ServicesJournal
Journal

peterevans is a leading provider of front to back office solutions for the financial services
sector. With 23 years experience peterevans takes a sophisticated and dynamic approach
to assist customers in reducing costs and witnessing an increase in margins by seamlessly peterevans
replacing costly and restricting legacy platforms. peterevans works in a collaborative New Broad Street House
manner and sees clients as partners to help meet all the demands in today’s marketplace. 35 New Broad Street
The xanite product suite offers a highly configurable, flexible and fully integrated, browser London EC2M 1NH
T: +44 (0) 29 20 402200
based, comprehensive front to back solution that complies with message standardization
E: info@peterevans.com
and settlement harmonization. Deployed as a single application or integrated as W: www.peterevans.com
components into your existing platform. Each of the xanite modules can be delivered via an
ASP or self-hosted. Covering: wealth management, custody corporate actions clearing and
settlement private client and on-line stock broking.

Pirum provides a full suite of automated reconciliation and straight through processing
(STP) services supporting Operations within the global securities finance industry. The
company’s on-line SBLREX service encompasses daily contract T: +44 20 7220 0961
compare, monthly billing comparison, mark-to-market & exposure processing, pending F: +44 20 7220 0977
trade comparison, income claims processing and C: Rupert Perry
custody reconciliation. E: rupert.perry@pirum.com
Subscribers to Pirum’s services significantly increase their operational efficiency and A: Pirum Systems Limited
reduce their risk by using Pirum’s solutions, as staff are able to focus on fixing the 37-39 Lime Street
exceptions instead of using their time to check and process routine business. These London, EC3M 7AY
automated processes are more scalable and risk controlled too, allowing W: www.pirum.com
significantly higher volumes to be managed without corresponding increases in
operations headcount.

Princeton Financial Systems (PFS), a 100% subsidiary of State Street Corporation, is a leading
provider of portfolio management and accounting systems, investment compliance, data For more information, visit Princeton
management, and reporting solutions to the global investment industry. Our solutions are
used worldwide by over 430 leading investment managers, custodians, insurance companies, Financial’s website at www.pfs.com or
pension funds, hedge funds, and banks, which manage combined total assets of over $5 www.pfs.aquin.com.
trillion in more than 40 countries.These include ABP, AEGON, AIG, Allianz Global Investors, T: +1 609-987-2400
BNP Paribas, CaIPERS, CACEIS Investor Services, Citi, Commerzbank, Credit Suisse, HSBC F: +1 609-987-9320
Insurance, Metropolitan Life Insurance, Nationwide, Northwestern Mutual, Prudential, RBS, C: Lorne Whitmore, Vice President,
Société Générale Securities Services, and State Street. MIG21, PFS’s award-winning investment Global Sales & Product Management
compliance and risk monitoring solution, optimizes pre-trade and post-trade compliance E: lwhitmore@pfs.com
checking, the administration of regulatory, prospectus, and internal investment guidelines A: 600 College Road East,
along with the consequent resolution workflows. PFS, headquartered in Princeton (NJ), has Princeton, NJ 08540, USA
offices located throughout the United States, Canada, Australia, Singapore, and China as well W: www.pfs.com, www.pfs.aquin.com
as in United Kingdom, the Netherlands, Luxembourg, France, Germany, and Switzerland.

Founded in 2002, Redi2 Technologies is a leading provider of fee billing solutions to the
global financial services industry. Redi2 offers flexible, feature-rich solutions that help
firms streamline operations, improve cash flow, reduce costs, enhance client service and Redi2 Technologies, Inc.
meet compliance obligations. 1771 Broadway St.
Redi2’s flagship fee billing and revenue management solution Redi2 Revenue Manager Oakland, CA 94612
helps financial professionals more easily manage the fee billing process, including client T: +1 (510) 834-7334
setup, multi-currency fee and accrual calculations, invoice and advice generation, E: info@redi2.com
W: www.redi2.com
accrual reconciliation, adjustments and reversals.
Our open APIs and support for industry-standard relational databases ease integration
with third-party solutions, including accounting, performance measurement and CRM
systems.

Netik’s team have spent the past 25 years perfecting the art of bringing
together market, reference, portfolio accounting, performance and risk data For more information please
from disparate sources into a single version of the truth (SVOTTTM). The result visit: www.netik.com
is a highly scalable and sophisticated business data model that has been or email: marketing@netik.com
designed to process all securities and offers a complete model for traditional
and alternative markets.

SimCorp Dimension is a powerful, comprehensive and truly seamless investment

management system. It can handle NAV and other calculations, with complete related
T: +44 (0)20 7260 1900
accounting, for a huge variety of fund structures and product types, including regional
F: +44 (0)20 7260 1911
specialities.
C: Elizabeth Gee, sales director
SimCorp Dimension has been designed from scratch as an enterprise-wide system, of SimCorp Dimension
handling all aspects of the investment management process and related administration E: elizabeth.gee@simcorp.com
functions, consistently. Data is recorded once into a core database so that reporting is W: www.simcorpdimension.com
made easy, there is no reconciliation of data and no duplication of procedures. A: SimCorp, 100 Wood Street,
-By cutting latency in securities processing, our clients are recognising new efficiencies, London EC2V 7AN
reducing costs and increasing throughput
-By streamlining their customer on-boarding processes, our clients are gaining faster
access to fees, increasing customer satisfaction, gaining greater cross-sell opportunities.

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 The North American
Securities Lending Forum
Presented by

GSL |
Global
Securities
Lending

LIQUIDITY
RISK
REGULATION

Limited places available Four Seasons Hotel

Register now at New York
www.securitieslendingforum.com Wed June 10th 2009

Sponsors

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 Nordic/Baltic Excellence
SEB is the leading provider of custody and clearing services in the
Nordic/Baltic region.
Business is built on long standing partnerships with our clients.
Our commitments are efficiency, reliability and providing the highest
service quality.
For further information please contact: Global Head of Custody Services: Göran Fors,
goran.fors@seb.se. Head of Sub-Custody Client Relations: Ulf Norén, ulf.noren@seb.se.

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