How to Build an IBOR

Terry Flanagan

Asset managers increasingly require a single, comprehensive platform for viewing their firm’s positions in order to better support investment decisions and the essential functions of trading, risk monitoring, reconciliation and reporting.

An IBOR (Investment Book of Record) is a database which will, in time, be a comprehensive solution to change the way that firms monitor and manage their holdings and positions, according to Paul Westgate, product manager at Linedata.

Westgate recommends that firms take a step back and analyze what they are looking to get out of an IBOR platform, and address specific business needs rather than attempt a massive overhaul.

Firms first need to define what IBOR is, and how it pertains to the focus of the company. Linedata views IBOR as a comprehensive set of records backing investment positions, both securities and cash – offering a holistic view of exposure to practice sound risk management.

“Firms should address whether they need to support or supplement their investment records and ask, ‘Are the sources of that data adequate to those needs?’” Westgate told Markets Media. “IBOR would not be an end in itself but an enabler to achieve other ends.”

The next consideration is with the growing regulatory demands on data today, is the cost of implementing a whole new system justified in comparison with solving the problem in the traditional manner?

“An IBOR solution for a single asset class manager may not be as relevant as it would be for a global 24/7 investment firm,” said Westgate. “This is dependent upon whether the firm stores data in silos and whether upgrading to an IBOR system would streamline reporting and processes. Having a holistic view of multi-asset classes and derivatives is imperative, whereas the demand may be less so for single-asset classes.”

Thirdly, firms need to integrate existing platforms with new technology. IBOR systems should be complementary to existing systems, rather than a redundancy on systems already in place.

“The first step is to evaluate their entire technology base to identify where gaps exist, followed by small ‘baby-steps’ to provide value or upgrades where there are voids,” Westgate said. “This way firms avoid the issue of doing too little or too much.”

Related articles

  1. Richard Turner of Insight Investment sees more automation and more transparency around cost and outcomes.

  2. The suite enables GAM to seamlessly manage market risk exposure and liquidity and investment risk.

  3. Asset manager anticipates an SEC decision on converting its fund to a spot bitcoin ETF by early July.

  4. Fidelity continues to hire thousands to support cryptocurrency.

  5. Tradeweb Draws Buy Side in Europe

    Net sales registered net outflows of €3bn, compared to €42bn in March 2022.