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Eze Software Prepares a Data Management Solution for AIFMD Reporting

Eze Software Group is bringing its experience of data management for Form PF, a Dodd Frank reporting requirement, to reporting under the Alternative Investment Fund Managers Directive (AIFMD). It is also encouraging funds within the scope of the directive to meet this week’s Financial Conduct Authority (FCA) deadline to file a Variant of Permission (VOP) form, an early step in achieving authorisation to operate under AIFMD.

The FCA’s VOP form is formatted as a yes/no questionnaire, but getting the answers right is difficult as fund managers affected by AIFMD – hedge funds, private equity funds and other alternative investment funds – must complete the form to show the systems and processes they will have in place, including systems for risk management and governance, on July 22, 2014, the deadline set by AIFMD for authorisation.

Phil Christianson, associate director at Eze Software, suggests the 22 January FCA deadline to file form VOP is not set in stone, but says fund managers should focus on filing the form, a one-time requirement, and then move on to the larger challenge of Annex IV, an annex of a consultation paper from the European Securities and Markets Authority that sets out a reporting template for AIFMD.

He explains: “From a data management perspective, the Annex IV reporting template is much like Form PF. It includes over 1,500 data points and requires a large and disparate data set. The best solution to filing in line with Annex IV is a central data repository that pulls together position data that is needed to populate the template. A central repository also builds consistency with the same data being used for regulatory reporting under AIFMD as is used for other requirements such as reporting to investors.”

Eze’s proposal of a central data repository for AIFMD reporting plays into its product set and leans on its experience of working with customers that must file Form PF. Customers reporting under AIFMD and in line with Annex IV can use the company’s Eze Data Management, essentially a data warehouse and tools built with Microsoft .net technology, to gather required data, regardless of its format and source, in a data repository. One key source is the company’s Tradar portfolio management system, which can be tightly integrated with the repository to allow the majority of position data to be gathered quickly and efficiently. Representations of regulatory forms and templates held in the repository can then be populated automatically, while operational workflows allow users to see which questions on a form have been answered and to what extent.

More than 30 Eze Software customers are using the company’s data management tools to file Form PF and Christianson says customers in Europe, the focus of AIFMD, will be first to file data using Annex IV templates. While the exact scope of Annex IV is not yet clear, he expects that, in future, US based fund managers that market in Europe will have to file reports under AIFMD in the same way as their European colleagues.

While AIFMD is top of mind, Eze does not see its data management platform as a solution solely for Form PF and Annex IV filing and instead promotes the platform as a base for existing and future regulatory form filing as well as for broader reporting.

Christianson says: “When Form PF was introduced in 2012 it was a massive filing requirement, so we built a front end for our data warehouse to help clients move data to Form PF. We have since added a solution for filing CPO PQR, a Commodity Futures Trading Commission reporting requirement, and we are now ready with a solution for Annex IV. But this is not just about filing forms, it is about best practice data management, producing rich reports, providing a full audit trail and offering a secure and scalable solution that can be extended to other regulatory forms and reporting requirements as they emerge.”

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