The Challenges and
Pressures on Fund Support David Loader
Going Forward - Nicosia The DSC Portfolio Ltd
June 2014
Diploma in Fund Administration
Change
“Increasingly, fund sponsors are seeing the administrator as an
integral part of the supply chain – and are looking for more
value added, over and above core transfer agency and
administrative functions – while growth in asset allocation to
alternative investments is also a key driver behind outsourcing
and acquisitions.”
Hedge Week
Diploma in Fund Administration
Challenges in providing Fund
Support Services
Regulatory
Change
Legal and regulatory
structure in
jurisdictions
More detailed
record keeping
Greater reporting
requirements
Diploma in Fund Administration
Investors
Governance
Loss of trust leading
to greater due
diligence
Impact of
requirements under
EU Directives and
jurisdiction
legislation
More transparency
Control frameworks
Provision of
information and
reporting
Independence of
key functions
Valuations and asset
verification
The Fund Support Universe
Assisting with
Risk
Management
and
Compliance
Administrator
and Transfer
Agency
Tax
Advice
Auditors
Legal
Depositary
Custody and
sub - custody
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Fund Administration
Fund Set Up
Secretarial
Technology
Risk Management
Compliance
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Role of Fund Administrators
• Companies providing services such as:
– Fund establishment and registration
– Transfer agency services
– Investment administration
– Accounting & bookkeeping
– Compliance support & statutory reporting
– Risk management support & Management Information
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The Depositary & Custodian
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Summary – Role of the
Custodian
• Maintain details of and carry out settlement
and safekeeping of asset
• Manage benefits and entitlements
• Stock lending and borrowing
• Cash management
• WHT reclaims
• Proxy Voting
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Summary – Role of the
Depositary
Any AIFM running an EU-based AIF will require a
full depository solution under AIFMD to carry
out three core duties under Article 21 of the
directive:
1. cash management
2. safekeeping of assets
3. general oversight of the AIF.
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Risk
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Operational Risks
Type
• Documentation
• Assets
• Fund records
• Valuations
• Accounting
• Fund Register
• KYC/AML checks
Source
• Systems
• People
• Communication
• Workflow
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Training and Development
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Training and Development
Challenge and Pressures
• Management skills and
experience
• Resource levels and
allocation
• Qualifications and core
competencies
• Change management
Issues/Drivers
• Asset allocations
• Investor base
• Client due diligence
• Outsourcing risk
• Regulatory, accounting
and tax changes
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Summary
• Changes in the industry have been far
reaching and pose many challenges
• Firms in Cyprus looking to develop fund
support services need to obtain and develop
the range of competencies and skills that are
now expected internationally
• Fund support is highly competitive and firms
will need the regulatory and commercial
environment to be able to compete
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Thank you
For details about the Advanced Certificate
and Diploma in Fund Administration
Contact CIIM or CLT International:
cltinternational@centlaw.com
+44 121 362 3540
To contact David Loader:
dal@dscportfolio.com
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