The case for automating shareholding disclosures

September 3, 2014 – By: Tony Sarkis, Head of Policy and Product Strategy EMEA

As new regulations mount up and asset managers review their data solutions, there is a strong case to be made for automating compliance with shareholding disclosure requirements.

AxiomSL - The case for automating shareholding disclosuresAsset managers face an enormous variety of shareholding disclosure regulations in the countries in which they have investments. The requirements include submitting reports to regulators, stock exchanges and other bodies when your holdings in individual entities exceed particular thresholds, when you invest in protected industries, become involved in takeover bids or engage in short selling. For asset managers that invest globally, the situation is complicated by the fact that the requirements are different in every country.

Asset managers tend to tackle these regulations manually. They often employ an analyst in each jurisdiction to monitor changes in their holdings and check whether these changes trigger a disclosure requirement.

This type of approach is slow, expensive and prone to error. For example, if an analyst forgets to include a data source in an aggregation or if a fund does not report their holdings on time, the asset manager may be unaware that they are required to make a disclosure. As a result, asset managers are leaving themselves exposed to the risk of significant fines in multiple jurisdictions.

With so many other regulations now demanding attention and resources, it is time asset managers take a more strategic approach to complying with shareholding disclosure requirements.

Asset managers need a single platform with embedded rules sets that reflect the shareholding disclosure requirements in all of the countries in which they have investments. This will eliminate the cost of employing an analyst or maintaining a separate data system in each jurisdiction.

The platform asset managers choose should include strong data consolidation and validation functionality so they can be sure they do not miss a disclosure requirement due to absent or incorrect data. The system should also provide up-to-date versions of the reporting templates needed in each country, and the ability to populate and submit these to the relevant authorities. This will relieve asset managers of the need to continually monitor updates to the different disclosure templates required in each country.

As they face up to regulatory change, asset managers really need a single platform that can be used to not only to comply with shareholding disclosure requirements around the world, but also with all other regulatory requirements – including Solvency II, the Markets in Financial Investments Regulation (MiFIR), the Alternative Investment Fund Managers Directive (AIFMD) and many others. This ‘one platform’ approach is the best way to significantly reduce the cost and complexity of compliance.

If they choose the right platform, asset managers can be confident they are complying with all of their shareholding disclosure requirements and much more.

To discuss this article further, please contact:

We use cookies in order to give you the best possible experience on our website. By continuing to use this site, you agree to our use of cookies.