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Global multi-strategy hedge fund selects AQMetrics platform to automate regulatory reporting

Segment: Alternative Investment Managers
Employees: 300+
Location: London, New York, Hong Kong

A $15bn+ global hedge fund with a 20-year track record and global reach came to AQMetrics looking for a multi-jurisdictional regulatory reporting platform. 

The challenges the firm faced included:

  • Regulatory reporting was being managed internally using in-house software. Whilst this solution met their operational needs, the compliance team wanted to reflect industry best practices in the firm’s reporting. They felt that a specialised platform could bring a level of independence and rigour to the reporting process.
  • Data strategy was core to their reporting platform requirements. They wanted to minimise the operational management of data downstream in the reporting process. They had a core requirement for strong data governance rules to catch errors and omissions earlier in the reporting cycle.
  • The firm had a wide range of unique and complex investment strategies, across convertibles, asset-backed securities, structured credit, corporate credit and loans. It was important to the firm that these strategies were reflected in the regulatory reports. A key requirement was to automate these investment strategies in the reporting generation software.  
  • Ultimately the firm wanted to de-risk the regulatory reporting process and to make it more efficient. As they continued to launch funds with new structures, and started to market in new jurisdictions, it was important to de-risk the operational process and to future-proof reporting in line with their scaling strategy.

The Solution

The first step in AQMetrics’ migration and onboarding process is to spend time with the firm, and to understand the uniqueness of the firm and their investment strategies.

We undertake a health-check of the current reporting lifecycle, analyse the firm’s historic regulatory reports, and identify where automation or process improvements can be made. Using our team’s knowledge and experience in both fund servicing and technology, we advise the firm how best to de-risk and automate their reporting process.

In this particular case, the firm had been managing all reporting in-house, and had a clear vision on the operational steps that they wished to automate. The AQMetrics configurable decision tree was used to map out the nuances of the firm’s strategies, which allowed for different treatment of sub-asset types and individual positions in the report calculations.

The next step in the onboarding process is to map the different data sources, looking at the quality and consistency of data flowing from each source. AQMetrics has a data dictionary which defines each data attribute and its use across all report types. This data dictionary provides the golden data source for reporting and ensures that data redundancy is avoided. 

Where there are gaps in the data, the AQMetrics data management tool allows for rule-based logic to be applied on data loading to address quality issues or derive data points. In this case study, all data was coming from a single in-house platform, via multiple separate files. AQMetrics created a batch-file API specifically to match the firm’s existing data extracts. 

For the first reporting cycle, AQMetrics shadowed the firm’s compliance team throughout, walking through each data point in the reports and the automated calculations that underpin them. To aid the review and oversight process, automated data extracts provided by the AQMetrics platform provide a full breakdown and look-through to the underlying data. This gives full traceability to the firm on the mathematical models in the platform which underpin the report.

The AQMetrics platform provides automated machine-to-machine connections for report submission to regulators across Europe and the US. This provided significant efficiency to the firm, who had been handling multi-jurisdictional submissions manually.

Finally, AQMetrics regulatory reporting team acts as an extension to the firm’s own compliance team. The AQMetrics team is laser-focussed on supporting regulatory filings and monitoring for regulatory changes.

This provides assurance that not only could the firm benefit from a powerful platform, but they could also utilise the team’s expertise and independence during each filing period, bolstering the firm’s operations.

The Result

With a single platform, AQMetrics  has integrated directly with the in-house OMS, offering a new data strategy that saves time, increases operational efficiencies, and allows the firm to scale their multi-jurisdictional reporting wherever needed.

Data errors and omissions are identified early in the process, negating the need for manual processing after report creation. In addition, the use of configurable decision tree technology allows report content and calculations to better reflect the firm’s strategy and operations.  While increased automation means the firm has decreased their reporting effort by 2 weeks per reporting period.

A third party platform and dedicated customer success team, meanwhile, ensures that the firm can call on the expertise of AQMetrics reporting experts wherever needed, and that the firm is always reporting in-line with industry best practices.

Not only does this streamline the entire reporting process, but it also de-risks their regulatory compliance and allows them to focus on oversight and control.

The AQMetrics difference

One Platform

With a single platform addressing all your risk and compliance needs, your firm can eliminate the need for multiple, disparate solutions.

Dependable Data

With automated data feeds and self-service data management, your firm has always accurate, always available insights.

Automated Workflow

With a platform blending quantitative analysis and explainable AI workflows, your firm’s compliance decision making is fully transparent.

Ready to get started?

See first hand our platform can transform the way you manage regulatory compliance.
Call us today+ 01 629 2607