Financial Institutions Increasing Investment in Regulatory Compliance and Data Management Capabilities
March 17 2017 - 9:49AM
Business Wire
SEC Regulations Drive Industry-Wide Investment in Data
Management and Processing for Reporting and Liquidity Risk
New global regulations and volatile market liquidity is
prompting more than half (56 percent) of asset managers and asset
owners to increase their technology and operational capabilities
over the next year to manage financial and other data to meet
regulatory compliance deadlines. A global survey of 300 asset
managers and asset owners, commissioned by State Street Corporation
(NYSE: STT), shows that despite compliance deadlines being a year
away, many fund managers have begun taking the steps needed to be
compliant in a complex rapidly-changing regulatory environment.
In the US, the SEC delivered major rule-making results after
extensive engagement and debate with the industry and modernized
its standards for data collection, reporting, and disclosure
practices. Fund complexes with over $1 billion in net assets must
file new regulatory reports beginning June 2018,1 and each
open-end fund (other than in-kind ETFs and money market funds) must
establish and administer written liquidity risk programs with
oversight by their boards that, among other things, classify each
investment holding of the fund into categories based on settlement
periods and limits a fund’s holdings in illiquid assets to no more
than 15 percent.2
“Across the globe, regulations are increasingly focused on data
transparency, portfolio holdings, valuations and liquidity, as well
as increased reporting to both investors and regulators,” said
Brenda Lyons, executive vice president and head of the specialized
products division for State Street Corporation. “Consistent with
this, in the US, the new SEC rules are focusing on monitoring,
managing and reporting a broad spectrum of data. Fund management
and boards have been actively evaluating and planning for how to
best address these regulations within their operations to achieve
compliance by the specified date.”
The findings from “Let’s Talk Liquidity: Opportunities in a New
Market Environment3,” a recent research report from State Street,
reveals that 42 percent of institutions are concerned about their
ability to meet liquidity compliance rules and provide accurate
liquidity status reports to external regulators, in addition to
their own management boards. Additionally, 47 percent intend to
rely more on external partners to improve their performance in this
area, as nearly one in five institutions feel their reporting and
workflow solutions for their regulatory jurisdictions are not
developed enough.
Click here to listen to a recent Ignites Webcast featuring
Brenda Lyons on how operations teams are adjusting their processes
to prepare for the upcoming rules, as well as the types of new
technology poised to impact the middle and back offices. Click here
to view State Street’s liquidity solutions brochure which provides
an overview of how we solve for clients’ liquidity challenges.
About State StreetState Street Corporation (NYSE: STT) is
one of the world's leading providers of financial services to
institutional investors, including investment servicing, investment
management and investment research and trading. With $29 trillion
in assets under custody and administration and $2 trillion* in
assets under management as of December 31, 2016, State Street
operates in more than 100 geographic markets worldwide, including
the US, Canada, Europe, the Middle East and Asia. For more
information, visit State Street’s website at
www.statestreet.com.
*Assets under management were $2.47 trillion as of December 31,
2016. AUM reflects approximately $30.62 billion (as of December 31,
2016) with respect to which State Street Global Markets, LLC (SSGM)
serves as marketing agent; SSGM and State Street Global Advisors
are affiliated.
CORP-2744
1 The Securities and Exchange Commission, October 13, 2016.2 The
Securities and Exchange Commission, October 13, 2016.3 Research was
made up of a quantitative survey conducted by Longitude Research,
and qualitative interviews with key industry participants. A total
of 300 respondents were surveyed, comprising 150 asset managers and
150 asset owners.
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version on businesswire.com: http://www.businesswire.com/news/home/20170317005325/en/
State Street CorporationBrendan Paul,
617-662-2903Bpaul2@statestreet.com@StateStreet
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