Hedge Funds Face New Data Hurdles
SEC will require detailed information from fund advisers on a new Form PF.
Registered investment advisers to hedge funds and other private investment pools face data management challenges in complying with a new reporting rule adopted by the SEC on Wednesday.
“The challenges are more process-driven then technical,” Gurvinder Singh, CEO of Indus Valley Partners/Cosmos Technologies, told Markets Media.
“The main requirement is that you have a flexible architecture with separation between front/middle offices versus a monolithic front-back system,” Singh said.
The rule requires that SEC-registered investment advisers report systemic risk information on a new Form PF if they advise one or more private funds.
Form PF will elicit nonpublic information about private funds and their trading strategies, the public disclosure of which, in many cases, could adversely affect the funds and their investors.
The SEC doesn’t intend to make public Form PF information identifiable to any particular adviser or private fund, although the SEC may use Form PF information in an enforcement action.
Cosmos Technologies, the product development arm of Indus Valley Partners, a niche consultancy focusing on the alternative asset management industry, provides software to address complex middle-office needs of alternative asset managers.
Its Polaris data warehouse populates Form PF data by providing a data entry screen which can be configured to automatically pull in details from internal systems. In addition, users can select relevant sections, and review and approve them in an integrated workflow. All Form PF data is archived for reporting and compliance purposes.
Among the tasks facing advisers in meeting Form PF requirement, said Singh, are organizing normalized data in one database from portfolio accounting, counterparties, and risk systems; a “calculation layer” on top of the normalized data for reporting purposes; and flexible workflow capability to meet the needs of a simple to a complex illiquid fund.
“With the impending deadline, Polaris presents a way to automate and speed up the entire filing process, while ensuring data is accurate and reliable,” said Singh.
The Pyth network is designed to bring real-world data on-chain on a sub-second timescale.
Jefferies and three fund managers will provide CLO equity capital and warehouse funding for new issues.
Pyth is built on a blockchain to handle receipt and distribution of fast-moving data.
CEO said significant loss relating to the failure of a US-based hedge fund is unacceptable.
The fund will leverage the platform to aide its AI-based strategies for the currency markets.