Wall Street Letter VOL. XLV, NO. 30 - Sept. 23, 2013 | Page 7

26 SEPTEMBER – 2 OCTOBER 2013

“Firms must learn to adapt to the
pressures on fees and the multiprime trends that have resulted
from the changes in the hedge fund
industry.
“While firms have started to
recognize these challenges, the survey
reinforces the need for brokers to
develop ways to better integrate their
systems with clients’ information
and enhance their ability to quantify
associated operational costs.”
For example, no firms surveyed
had a fully-automated onboarding
process for clients, with just 44% using semi-automated process.
Elsewhere, the survey found liquidity management could benefit from
better data management processes
and technology, with 71% having no
method for notifying their treasury
group of large inflows and outflows.
“The prime brokerage industry
today is under tremendous pressure
to respond to the shifting landscape,”
added Mark DiMaio, principal, banking & capital markets, Ernst & Young.

“Therefore, the industry is focusing
on how to better quantify operational costs in order to increase the
profitability margins of new and
current clients. Prime brokers need to
understand these costs to tier clients
effectively.”
TECHNOLOGY

SJLS, Charles
River to expand
collaboration
SJ Levison & Sons and Charles River
plan to expand a recently announced
partnership by adding to its asset class
coverage, according to Des Gallacher,
vice-president of Charles River, and
Matt Levinson, CEO of SJLS.
The partnership would combine
the global equity transaction cost
analysis capability of SJLS, the Trade
Analysis Platform, with Charles
River’s Investment Management
System (IMS), integrating the former

into the latter, Gallacher noted.
The collaboration of the platforms
will allow Charles River’s buy-side
clients trading equities to measure
investment strategies and broker performance in real time while lowering
trading costs and maximizing alpha,
according to Gallacher.
The cross border trading done by
Charles River’s clients is fostering
interest in FX trading, noted Gallacher. He added the vendor has been
working closely with SJLS so both
parties are optimized for the addition
of FX, and other asset classes, within
a few months.
“Clients require Charles River to
constantly hedge large FX volumes,
plus we recently added FX execution
to the IMS,” said Gallacher. “We will
work closely with SJ Levinson to integrate and evolve product expansion
into various asset classes including
FX.”
Levinson noted the venture also
provides SJLS with access to unexplored client types.

POST-TRADE

Industry participants predict hedge fund reporting consolidation

S

ome industry participants with a hand in the hedge fund
market are predicting that global regulators are more likely
than not to make changes to their requests from the alternative
funds in order to get a more complete view into the global landscape, according to comments made at AdventConnect 2013 in
San Francisco last week.
The US reporting regime, which uses Form PF, has been in
place since 2012, while reporting to European regulators under
the Alternative Investment Fund Managers Directive, has only
been in effect since July 2013.
In response to audience questions during one of the last
panels of the conference, Jeanette Turner, general counsel at
Advise Technologies, said she anticipates all of the regulators to
combine forces to create reporting regimes that are much closer
to each other than they are now, both between different regulatory regimes and within individual reporting regimes.
“What baffles me is that in AIFMD, one of the intentions
behind it is to harmonize the information and data across
Europe, and yet, at least for non-EU AIFMs right now, it’s not
harmonized,” she said. “I have to think that over time, whether

through transition...