Northern Trust is up and running with a delegated client trade reporting service based on the software-as-a-service (SaaS) version of Sapient Global Markets’ Compliance Management Reporting Solution (CMRS). The solution supports Northern Trust in fulfilling its clients’ derivatives reporting requirements under EMIR and Dodd-Frank, and eases the burden of keeping up with regulatory change.
Northern Trust considered whether to build or buy a reporting solution for EMIR and Dodd-Frank, selecting to buy from and work with Sapient Global Markets and build out a reporting service using the ready-made CMRS platform, rather than develop a piece by piece, regime by regime, solution in house.
The CMRS SaaS solution has been supporting Northern Trust’s outsourcing, custodial and fund administration functions, including investment operations outsourcing and hedge fund services, since the first EMIR reporting requirement came into effect in February 2014.
Essentially, the platform imports Northern Trust’s client trade data into a single system that handles trade reporting and reconciliation, including collateral and valuation, portfolio reconciliation and dispute management. Clients can configure their own reporting rules, manage data sources and publish reports to trade repositories in the format required by the local regulatory regime. Under the terms of the agreement between Northern Trust and Sapient Global Markets, the latter must update the CMRS platform with any regulatory reporting changes within five days.
Peter Sanchez, head of Northern Trust Hedge Fund Services, explains: “The CMRS solution allows us to automate key derivatives processes, which will improve efficiency and reduce costs. It also enables us to streamline reporting and speed up the data collection, transformation and submission process, helping firms minimise business risk associated with non-compliance.”
Joshua Satten, global head of OTC structured products at Northern Trust Hedge Fund Services, says take-up of the service has been predominantly among European counterparties, hedge funds and asset managers that must comply with EMIR reporting requirements, although some clients reporting under Dodd-Frank are also using the service.
While Northern Trust is using CMRS to support EMIR and Dodd-Frank reporting, it does not rule out expanding its use of the platform if clients so request. Brian Slutz, director at Sapient Global Markets, says: “We initially offered the platform with support for derivatives, but it goes beyond EMIR and Dodd-Frank to cover similar regulations in other countries. We are looking at opportunities to provide a bigger platform that will support reporting for regulations such as Fatca, Form PF, AIFMD and MiFID II.”