By Todd Sloan
An investment manager’s post-trade operations environment generally evolves as the firm grows. Technology solutions are important for helping firms manage increased trade volumes, mitigate risk and lower costs. Operational efficiency is always the goal, but over time, siloed solutions used to manage a particular area of operations get in the way of reaching that goal due to the tendency to make solution choices according to organizational structures and processes already in place.
In hundreds of discussions with investment managers over the years, we’ve often discovered the existence of multiple reconciliation silos, little collaboration across teams, and limited visibility into the data needed to improve the situation. In order to find the best solution to the problem, first we must understand the full impact and significance of the problem on a firm’s business.
The Dangers of Operational and Reconciliation Silos
Electra Blog Posts, Buy-Side Technology, Operations Management, Reconciliation Solution, Electra Information Systems, reconciliation, Hedge Funds, fund administrator, Data Reconciliation, SEC Compliance, SEC, Investment Firms, automation, Investment Managers
by Todd Sloan
One of the most important responsibilities of the fund administrator is to calculate the fund net asset valuation (NAV). Before calculating the official NAV, the fund administrator must ensure the accuracy of the data by way of reconciling the investment manager’s data against that of the prime broker or custodian. Fund administrators are well-versed in the different ways that a NAV should be calculated and the need to agree with investment managers on the methodology to be used before posting an official NAV.
The question is, why does the investment manager need to reconcile the makeup and accuracy of their NAV if a service provider or fund administrator is already performing reconciliation? After speaking with several operations professionals across the hedge fund space, we identified four main reasons why an investment manager should shadow their service provider or fund administrator:
Electra Blog Posts, Buy-Side Technology, Reconciliation Solution, Electra Information Systems, reconciliation, shadow accounting, Hedge Funds, NAV, fund administrator, Data Reconciliation
by Todd Sloan, SVP Product Management
Most reconciliation solutions provide the data normalization and matching capabilities needed to identify and categorize exceptions. These features have helped buy-side firms to streamline post processing and improve the quality of financial records. However, the reconciliation process can become cumbersome when an exception is identified, and the investigation process begins. It is at this moment when different data sources (such as corporate actions, failed trades, collateral, missing funds, etc.) need to be accessed to troubleshoot a break and determine the root cause of an exception. The time and effort taken to open different applications and web pages, rummage through the information, and then research and manually compare results diminishes the productivity of the operations team or IT staff.
Electra Blog Posts, Buy-Side Technology, Operations Management, Reconciliation Solution, Electra Information Systems, reconciliation
FTF News by Eugene Grygo
John Landry, CEO of Electra Information Systems, talks to FTF News about industry issues and why the company won the Best Reconciliation Solution award for the third time in a row in 2018.
(Growth can be a double-edged sword for some securities firms as it will bring in new revenues and the potential for more profits. However, incumbent systems and operations will have to be adjusted to meet the new demands of the front office. So says John Landry, CEO of Electra Information Systems, in an interview with FTF News. The need to scale operations to manage the growing demands of portfolio managers and others in the front office has been a big driver for overhauls of reconciliation systems. Landry spoke to us about Electra's selection as Best Reconciliation Solution for three years in a row, and other matters.)
Why did Electra embark upon four major client-driven changes in 2017 — enhancements for pending trades, approval workflow, auditing and historical data accessibility, and event-driven reconciliation?
Electra views our clients as an extension of our own product management team and the features added in 2017 were the result of that partnership. Our clients identified areas of opportunity that could provide maximum time-saving for their staff and we worked closely with them to enhance Electra Reconciliation to address each.
Electra Blog Posts, FTF News, Reconciliation Solution, Electra Information Systems
Electra Reconciliation increases efficiency at London-based asset manager
NEW YORK –June 21, 2018 -- Electra Information Systems (Electra), the leading provider of state-of-the-art reconciliation solutions for the asset management industry, today announced that London-based Cardano has implemented Electra Reconciliation to support intraday reconciliation to increase efficiency and eliminate risks associated with waiting until the next day for exceptions to be resolved.
Intraday reconciliation has become increasingly important as managers accelerate the frequency at which they process reconciliation data and move away from overnight file processing. Electra’s intraday reconciliation capability addresses the risks associated with waiting until tomorrow to resolve exceptions identified today. Electra utilizes a proprietary algorithm that identifies and excludes duplicate data while allowing true reconciliation updates to enter the workflow. This approach to delta identification eliminates the importing of erroneous exceptions and the time lost investigating them. Electra Reconciliation also manages the migration of exception management-related material between the historical data in the solution and all incoming delta updates. This important feature safeguards the integrity of the investigation audit trail.
Electra Blog Posts, Reconciliation Solution, Intraday
During a recent meeting, a prospective client reiterated just how much time they spend every day resolving exceptions. Most of the vendors they met with prior to Electra were touting improvements made to matching rates through machine learning or another technology innovation. This prospect questioned the actual time they would save in the investigation process by increasing match rates for their holdings and transactions data by a few tenths of a percent. Instead, our prospect saw through the buzzwords and noted that the vast majority of their exceptions are true breaks that often require them to leave the reconciliation application to diagnose why the break occurred and what steps are needed for resolution.
Electra Blog Posts, Reconciliation Solution, Electra Information Systems