Transparency Drives Tighter Reporting Windows


The buy side has reached a regulatory tipping point with the US Securities and Exchange Commission’s October 2016 report modernization effort for registered investment companies.

The regime’s new requirements mean that firms can no longer handle their reporting policies and procedures as they once had, according to Todd Moyer, executive vice president, global business development at reporting platform provider Confluence.

The new rules introduce a 30-day reporting cycle, which is smaller that than the typical quarterly, semi-annual, and annual reporting periods with which most assets managers are familiar.

Todd Moyer, Confluence

Todd Moyer,

“Not only do they have to deliver data faster but include new data as well,” he said.

Compounding the operational pain is the uncertainty of how the final version of a proposed rule’s final version will look like compared to its original version.

“We will see a regulation change 30-, 60-, or 90 times from the original rule to the actual final output,” said Moyer.

However, the greatest challenges for asset managers’ back offices is when regulators tweak their reporting requirements mid-reporting cycle.

The National Futures Association is notorious for changing CPO-PQR reporting requirements inside of the filing period, according to Tom Pfister, global head of regulatory reporting solutions at Confluence.

“For example, you must file PQR for your commodity pools as of June 30, 2016,” he explained. “The NFA has made—and all signs indicate that they will continue to make—changes to reporting after the as-of-date, but before the reporting date (e.g. mid-July changes). They expect those changes to be applied to  June 30 reporting.  In practice, this means that you have to be extremely flexible to service the NFA’s requirements. It isn’t good enough to throw up your hands and say that you gave it a best effort.”

These mid-cycle changes are far from a situation for the US markets, added Moyer.

“There was a mid-cycle change in the Luxembourg market in which a change was made to the regulation post reporting cycle,” he said. “The reporting cycle began June 30, and the regulatory bodies introduced changes as late as mid-July that required firms to adjustments on the fly within that active reporting cycle.”

As a result, Moyer sees asset managers adopting a more data-driven approach to the new regulatory requirements in the US and Europe.

“There has been a sense of urgency building over the past several months,” he said. “Things must be done differently.”


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