01.14.2015
By Terry Flanagan

Bloomberg Hones In on Regulatory Compliance

Regulatory compliance continues as a major theme for buy-side institutions, which are being tasked with complying with a myriad of regulations including Dodd-Frank, EMIR, Basel III, MiFID II, Fatca, and AIFMD. They are allocating resources and budgets to either support the compliance required or reduce operating costs in order to boost overall efficiency.

“Probably the most significant challenge our clients faced (in 2014) was to stay ahead of the many deadlines and requirements associated with changing regulations,” Dan Matthies, global head of Bloomberg Asset and Investment Manager, told Markets Media. “We made this a focus and not only stayed ahead, but also were the first to market with many solutions for major regulatory initiatives. Simultaneously, we improved our broader compliance functionality allowing clients to work more collaboratively with regulators and investors.”

Bloomberg AIM is an integrated suite of products designed for buy-side institutions, hedge funds and proprietary trading desks, including portfolio management, trading and operations.

In 2014, Bloomberg saw many managers shift or extend their investments into new markets, assets and investment styles. “As a result, we implemented more than twice as many users as we do in a typical year,” said Matthies. “We spent the year working with these clients, harnessing our product coverage, features and global community to help make this happen.”

The AIM Compliance Package provides expertise on rule construction and violation management for your client, firm, and regulatory requirements. It includes construction of up to 100 rules per year or review of up to 200 existing rules per year, as well as preliminary testing of rules, according to the company.

Bloomberg has enhanced its support for derivative products and derivative regulatory requirements, driven by client demands for more electronic trading and reporting of derivatives in response to regulatory pressure, increased request for liquidity aggregation across asset classes, and a move away from accounting book of record to investment book of record systems.

Bloomberg AIM is integrated with Bloomberg’s swap execution facility, as well as European Market Infrastructure Regulation (EMIR) reporting, and it’s assisting its European clients with the recent T+2 regulations, according to Matthies.

Order management systems have undergone changes since their origins as more asset classes trade electronically. “OMS was born in the 1990s to check compliance throughout the trade lifecycle and to organize trading workflow,” said Matthies. “This mostly applied to equities, which was the only asset class with significant electronic volume at that time. Today that’s changed. All major asset classes trade electronically and investors and regulators expect the same compliance checks found in equities for everything traded.”

Managers now need “a truly multi-asset solution that allows them to follow a consistent investment process so they can more easily communicate with investors and regulators,” he added.

The OMS must also give them the investment agility they need, from both a product and a service standpoint, to move into new areas. It must also be able to drive efficiencies through automation, and to offer trading intelligence by pushing the most relevant and trusted information to users whenever human judgment is required.

“This combination enables a manager to be more agile, lean and vigilant, and in turn, help them to gain a competitive advantage,” Matthies said. “That’s what we’re focused on providing for our clients in 2015.”

Featured image via Zerbor/Dollar Photo Club

Related articles

  1. Agency broker moves beyond execution to offer a broader suite of services.

  2. Algorithms have become more prevalent in the spot FX market.

  3. Congress Unlikely to Act on HFT

    QB’s Algo Suite for futures market trade execution is also being co-located to HKEX.

  4. Breaking data silos is key to deploying automation beyond 'nuisance' orders.

  5. They can be used on quantum hardware expected to be available in 5 to 10 years.