Tuesday 31st March 2015
NEWS TICKER: TUESDAY MARCH 31st 2015 : Following a recent Morningstar Analyst Ratings Meeting, Morningstar has downgraded the Artemis UK Smaller Companies fund to a Morningstar Analyst Rating™ of Silver. The fund previously held a Gold rating. Morningstar continues to believe the experienced manager and robust process make this a strong choice for UK small-cap exposure, but Morningstar feels a Silver rating provides a better reflection of the fund’s relative merits within the sector. Indeed, given the manager’s focus on high-quality companies with resilient business models, Morningstar would have expected the fund to protect investors’ capital in 2014 to a greater extent than it did; an outcome which has slightly dented Morningstar’s conviction in the manager’s application of his process - President of the European Council Donald Tusk’s meeting with Prime Minister of Spain Mariano Rajoy today covered many points, but concern over a lack of government in Libya and the causes and consequences of instability and insecurity in the Southern Neighbourhood took up much of the discussion. “The Prime Minister and I had a very open discussion on both the causes and consequences of instability and insecurity in the Southern Neighbourhood. We had a good exchange on what the European Union is already doing - in terms of assistance, counter-terrorism and migration - and how we can better target our efforts to make a real difference,” notes Tusk in a briefing note issued today - Data published today by the Association of Investment Companies (AIC) using Matrix Financial Clarity suggests that investment company total purchases on platforms by advisers and wealth managers were 19% higher least year (with purchases worth £452.7m) and more than double the figure in 2012. In Q4 2014, platform purchases of investment companies were at £110.3m, 10% higher than purchases of £100.3m in Q4 2013 and 90% higher than purchases of £58.1m in Q4 2012. Investment company purchases at £110.3m in Q4 2014 were stable when compared to £110.6m in Q3 2014. Whilst 2014 was a strong year for purchases there was also a significant increase in sales, which rose 40% to £290.9m compared to £208.4m in 2013, suggesting some advisers and wealth managers are taking profits and rebalancing portfolios. Ian Sayers, Chief Executive, AIC, said: “Though sales have increased, we should remember that this trading activity all helps to improve liquidity. The AIC has trained over 3,000 advisers in response to RDR, and has recently increased its resource in this area, with the recruitment of Nick Britton, the AIC’s Head of Training. This will help us to increase awareness and understanding of investment companies with a refreshed training programme and the capability to meet and support more advisers.” The Global and UK Equity Income sectors were the most popular for advisers and wealth managers in 2014 overall, accounting for 18% and 13% of purchases respectively. The Infrastructure and Property Direct – UK were the third and fourth most popular sectors over 2014, accounting for 8% and 7% of purchases respectively. Transact and Ascentric continue to be the top platforms for investment company purchases, accounting for 49% and 20% of the market respectively in 2014. Alliance Trust Savings are increasing in popularity with financial advisers, their market share increasing to 18% in 2014 from 12% in 2013 - The Straits Times Index (STI) ended -7.25 points lower or -0.21% to 3447.01, taking the year-to-date performance to +2.43%. The FTSE ST Mid Cap Index declined -0.17% while the FTSE ST Small Cap Index declined -0.24%. The top active stocks were SingTel (+0.46%), DBS (-0.10%), UOB (-0.99%), Global Logistic (+0.38%) and OCBC Bank (-0.75%). The outperforming sectors today were represented by the FTSE ST Technology Index (+1.08%). The two biggest stocks of the FTSE ST Technology Index are Silverlake Axis (+1.86%) and STATS ChipPAC (unchanged). The underperforming sector was the FTSE ST Basic Materials Index, which declined -1.88% with Midas Holdings’ share price declining -3.23% and Geo Energy Resources’ share price declining -0.52%. The three most active Exchange Traded Funds (ETFs) by value today were the IS MSCI India (+0.13%), DBXT MSCI China TRN ETF (+1.25%), DBXT FT China 25 ETF (+0.28%). The three most active Real Estate Investment Trusts (REITs) by value were CapitaMall Trust (+0.92%), Ascendas REIT (+1.17%), Suntec REIT (-1.07%). The most active index warrants by value today were HSI25000MBeCW150429 (+6.12%), HSI24800MBeCW150528 (+5.80%), HSI24000MBePW150528 (-7.32%) - Mississippi’s Rankin County School District has issued an online survey meant to gauge public opinion of a potential bond issue to build new classrooms. The bond issue would be used for construction of new instructional facilities, and school board officials have been discussing the possibility for a while. No specific details of the amount or number of facilities have been released, but school board Vice President Ann Sturdivant said district personnel are working to assess the needs. Rankin voters rejected a $169.5m bond issue in 2011 to upgrade and build new classrooms, but Sturdivant said she believes people see the need to remedy overcrowding issues, particularly in the Florence, Brandon and Northwest zones and that tapping the US debt capital markets will be a logical step -

A streamlined approach

Friday, 15 June 2012
A streamlined approach The European asset management industry has grown considerably over the last ten years. Assets under management (AUM) stood at €3trn at the end of 2001, and had reached €7.89trn by the end of the second quarter (Q2) 2011. This growth, which will support the savings and retirement of a large portion of the European population, means asset managers have an enormous responsibility to their end clients. By Ann Doherty and Brian Coughlin, JP Morgan Worldwide Securities Services (WSS). http://www.ftseglobalmarkets.com/

The European asset management industry has grown considerably over the last ten years. Assets under management (AUM) stood at €3trn at the end of 2001, and had reached €7.89trn by the end of the second quarter (Q2) 2011. This growth, which will support the savings and retirement of a large portion of the European population, means asset managers have an enormous responsibility to their end clients. By Ann Doherty and Brian Coughlin, JP Morgan Worldwide Securities Services (WSS).

It is inevitable that asset managers want to retain their investment gains by reducing uncertainty and risk from their activities as much as possible and increase straight through processing (STP) and transparency, particularly in today’s volatile environment. One way to achieve that is to use a custodian that can provide all of these benefits through a streamlined product offering to help reduce both costs and risks while keeping up with the ever-

changing regulatory environment.



The objectives of asset managers present their own challenges, particularly with a regulatory reform agenda framed by G20 commitments, which culminated in the Dodd Frank Wall Street Reform Act and the European Market Infrastructure Regulation (EMIR). Since 2008, regulation has been constantly evolving and expanding. In addition to those two regulations, investors also have to adjust to the second iteration of the Markets in Financial Instruments Directive (MiFID II), UCITs IV, AIFMD, FATCA, Basel III and Solvency II.

To understand and execute on what regulators expect from them, asset managers today look to their service provider for help with the provision of an industry-leading  global custody and securities services offering with innovative technology to meet their daily requirements; seamless execution to increase STP and reduce risk; thought leadership to help them understand how regulation and potential market events could affect them (as well as their end-clients) and provide appropriate and timely data analysis.

Inevitably, the most sophisticated asset managers want to work with a securities services provider that can provide global reach and which has sufficient resources of capital to invest in industry-leading systems and technology. That means all of their requirements are met in one place. Investors then benefit and can have confidence in the fact that whatever complexity is injected into the market, whether by unexpected market events or by regulators, their custodian will be able to manage it.

Next, asset managers want seamless execution to help them eliminate risk and costs. Recognising the important role that asset managers play in the savings and pensions industry, regulators are putting pressure on them to provide their end clients with transpar­ency and as little risk as possible.  To do that, fund managers must tighten up the chain in their post-trade activities. 

For their part, custodians have been moving into more consultative technology-driven services for years, which asset managers and other users of custodian and related securities services have greatly benefitted from. Increasingly, these users of securities services are looking to their providers to move even closer to their front office, even coming just after the trading and investment decision. 

In the past, using one firm’s investment bank to execute trades and using the same bank’s custodian arm might have raised concerns about whether this one-stop-shop provided the best execution and cost in the market. ­Regulations, particularly MiFID, have removed that uncertainty.

Finding a provider that can tick the first two boxes as well as provide the critical consultative thought leadership all asset managers look for to keep up with regulatory and market changes, isn’t easy. Asset managers look to their service providers to provide ­information about changes arising from the rapidly evolving regulatory environment, to ensure that new requirements are understood and ­prepared for. Large international firms that are present in multiple jurisdictions are best placed to have a view of regulatory changes and to adapt their services to new requirements on a global basis.

Lastly, asset managers also rely on service providers to help them provide up-to-date and transparent data ­analysis, which is a critical reporting requirement to regulators, governments, trustees and other stakeholders, and is part of their own internal risk reviews.

This means asset managers want detailed information about their ­transactions, securities held, and ­breakdown of the core characteristics of those assets. They also want this data delivered in a fast and efficient manner, which requires a strong STP framework. This presents a challenge and an opportunity for service providers as it is not an easy task pulling together different sets of data and presenting it in a format that asset managers can consume and customise.

To meet all of these requirements, a service provider has to continuously invest in technology, and have ­regu­latory experts who can quickly analyse new regulations and understand how they will fit and potentially impact existing regulations with which asset managers are already complying. This re­quires a delicate balance between investing in business enhancements and people, while maintaining required capital levels. Large global custodians with the capacity to invest in its technology and systems are more able to make these investments than smaller firms.  

Asset managers are looking to ­securities services providers to act more strategically then ever before. By using one bank for all activities following the investment decision, asset managers are recognising their ability to cut potentially weak links from their post-trade chain, and rationalise the number of providers they use. This coordinated servicing effort across a firm, usually a bank, enables the large and fully-integrated players to really understand an asset manager’s needs, requirements, product and geo­graphical expansion plans. This support across many distribution channels helps fund managers reduce cost,

outsource the risk by leveraging ­operational cap­abilities, risk management capabilities and therefore offers a much better and broader value proposition. Today, a service provider must have all the ­necessary tools in the tool box and be willing and able to use them.

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