Mike Maltby, Head of Market Strategy
We preach data centricity at Eagle because it is becoming essential for investment management organizations to have a solution that offers a controlled environment to navigate both ongoing and evolving compliance demands. The data centric approach is also followed by many of the firms that Eagle works closely with , such as Donnelley Financial Solutions, to deliver solutions to current and future regulatory requirements. For instance, last year the SEC proposed and has since passed wide-ranging changes that would introduce new monthly and annual reporting forms (N-PORT and N-CEN, respectively). The SEC now requires “census-type” information as well as portfolio reporting in which fund managers and registered investment companies must provide enhanced and standardized disclosures. The initiative is designed to enable transparency for investors and more thorough analysis by regulators.
With the specifics of the proposal now clear, the SEC identified that it will be seeking data related to the pricing of portfolio securities; information regarding repurchase agreements, securities lending activities and counterparty exposures; terms of derivatives contracts; and discrete portfolio-level and position-level risk measures to interpret fund exposure in changing market conditions. Both the N-PORT and N-CEN filings have already been incorporated into other amendments floated by the SEC, including the proposal in December 2015 for new derivatives rules for registered funds and business development companies.
Make no mistake, the demand for accurate and timely data is only going to increase as new regulatory rules are put in place. The SEC’s reliance on data and standardization will only increase the scrutiny on a firm’s ability to meet these heightened demands. Those that have a strong data platform that helps them keep pace with the evolving regulatory environment—without disrupting their organization each time a new rule or amendment is introduced — will have a distinct competitive advantage over those who cannot.