Regulatory Reset: What Irish Funds Need to Know About CP86

By Lorraine Lyons, Business Development Representative

For the Irish Fund Management industry in the coming year, one regulatory change stands out: namely the introduction of the Fund Management Companies Guidance, or CP86. This far-reaching set of initiatives has of course been in the pipeline since 2014, when the Central Bank of Ireland (CBI) launched the consultation process, and so many of the elements outlined in CP86 should already be in place. However, the deadline for all Irish Funds to demonstrate their compliance with the new rules has now been set for 1 July 2018. In practical terms, this means that anyone sitting on the board of an Irish authorised UCITS management company, alternative investment fund manager (AIFM), self-managed UCITS or internally managed AIF needs to be aware of this new guidance – and have a plan in place for how to meet the new demands.

But what are the aims of CP86 and how is it likely to impact Fund Management (FM) companies in the country? According to the Central Bank of Ireland (CBI), the new rules are designed to underpin the achievement of substantive control” in the industry, with the aim of further supporting the existing supervisory framework for greater transparency and oversight of the Irish FM sector. And in order to be able to make this assessment, the CBI requires that all fund management company’s board minutes reflect its adherence to the six key compliance areas outlined in the guidance paper. These six areas are as follows:


  • Delegate Oversight. This relates to when a board delegates certain day-to-day data management activities to external third-party companies. In particular, it stresses that even when certain activities are delegated outside the firm, the board nevertheless remains ultimately responsibility in legal terms and must demonstrate that it still has oversight and control over those functions.
  • Organisational Effectiveness. One of the independent directors will need to take on this role to ensure that the company structure is kept under ongoing review. They should ensure it is appropriate for the size, nature and complexity of the firm and ought to be ‘change leaders’ who bring proposals to improve effectiveness to the board.
  • Directors’ Time Commitments. Directors are required to commit around 2000 hours to their role and to limit the number of directorships they hold in Fund Management companies.
  • Managerial Functions. There are six key managerial roles identified in the guidance and each of these must be assigned to individuals within the company, just as they are in other sectors such as banking.
  • Operational Issues. The CBI requires firms to retain records which can be readily retrieved. Thus if the Central Bank requests documentation from a fund management company before 1pm, it should be provided to the CBI on the same day, or by 12pm on the following business day if requested after 1pm. There is also a new requirement for fund management companies to maintain, and monitor daily, a dedicated e-mail address – and this should also be provided to the CBI.
  • Procedural matters. These are the details around how FM companies should apply for authorisation with the CBI, or if they are already monitored, how to maintain their relationship with the Central Bank.


In fact, the overall aim of CP86 is not to introduce a radical set of new regulations but rather to ensure compliance with the existing regulatory obligations and to allow the CBI to carry out engagement without constraint. So while firms may already meet many of these requirements, the new regulation now mandates that they document and demonstrate this in an appropriate and efficient manner. In order to meet these requirements consistently, firms should ensure they have a robust, secure and automated solution in place, which is specifically designed to meet these new requirements.

With the July 2018 deadline for compliance only a matter of months away, the time to be looking at your organisational structure, and thinking about the necessary changes, is very much now.


AQMetrics Receives Authorisation To Operate A MiFID II ARM

Central Bank of Ireland approves AQMetrics as an ARM under MiFID II

Dublin, 02 January 2018 – AQMetrics Limited, the award-winning RegTech that provides risk and regulatory reporting services across global regulatory regimes, announces today that it has received approval from the Central Bank of Ireland (CBI) to operate a MiFIDII Approved Reporting Mechanism (ARM), with effect from 3 January 2018. The authorisation permits AQMetrics to report MiFID firms’ transactions to National Competent Authorities (NCA) across Europe.

With MiFID II coming into effect this week, AQMetrics has been conducting testing of its ARM since the summer of 2017 and has also conducted end-to-end testing through the UAT environments of National Competent Authorities.

Geraldine Gibson, CEO at AQMetrics said, “AQMetrics was created to service both the buy and sell side of the financial services ecosystem. Detection of market abuse is a fundamental part of the AQMetrics solution set. As tracking and tackling market abuse is a key aim of MiFID II, being authorised to report transactions of MiFID II firms directly to all European regulators is a major milestone for AQMetrics. With clients including stockbrokers, banks and investment firms AQMetrics now seamlessly services both the buy and sell side for future and emerging regulations’.

Claire Savage, COO at AQMetrics added, “Not only does our authorisation confirm that AQMetrics has the operations, business continuity plans and information security management system required to operate as a regulated Approved Reporting Mechanism (ARM) under MiFIDII, it further endorses AQMetrics commitment to its clients to do everything it must to remain the gold standard, one stop shop, for regulatory reporting”. ”

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About AQMetrics

AQMetrics is an award winning RegTech company focused on delivering risk and regulatory reporting services to global investment firms. AQMetrics replaces slow, outmoded, inefficient and oftentimes manual methods of managing risk and regulatory reporting. Through its unique blend of deep experience in innovation, technology, law, and financial services AQMetrics has built a platform that performs markedly better, helping AQMetrics clients leverage technology to more efficiently meet risk management and regulatory reporting obligations. The AQMetrics platform has been tested, proven and perfected.

AQMetrics was recently awarded ‘Best New Technology Introduced over the last 12 months – Risk Compliance and Reporting’ at the 2017 Waters Technology Awards, ‘Best compliance product for small and start up firms’ at the 2017 HFM US Technology Award and was noted as a ‘Most Successful FinTech’ at the 2017 Euro Finance Tech Awards.

More information is available at or follow us on Twitter @AQMetrics

Media Contact

Lorraine Lyons

T: 353 1 903 5437



MiFID II:Articles

Dublin MiFID II Meetup: Time to Prepare and Prioritise

Dublin MiFID II Meetup

AQMetrics hosted its latest Dublin MiFID II meetup last week, just as the countdown to implementation has turned to the number of weeks and days remaining – rather than months. Co-hosted with Brown Brothers Harriman, the event brought the Dublin MiFID II community together to discuss how best to prepare for the changes being ushered in under the new rules. The timing of  the Dublin meetup was  significant,  following on from the Central Bank of Ireland’s review on suitability requirements. As a result, the regulator has urged firms to assess their individual requirements with their boards before 31 October 2017.

Call for clarity

Adrian Whelan, Senior Vice President of Regulatory Intelligence, Brown Brothers Harriman chaired a panel of leading industry figures as they reviewed where the biggest challenges lie. Ronan Gahan, Group CEO of Platform Capital Holdings, spoke on the previous lack of a MiFID representative body, and how some SME’s have struggled as a result with regulatory engagement. Transaction reporting was highlighted as a key challenge by Claire Murakami, Bank of Ireland, Senior Manager Business Controls, due in large part to the sheer amount of data involved. She also warned that a lack of clarity meant firms were at risk of having to re-work everything at a later date if they find their original interpretations of the rules were incorrect. Niamh Mulholland, Associate Director Regulatory, KPMG agreed that there is uncertainty around what information is required to fulfil regulatory obligations, but warned that regulatory engagement has been very detailed around the requirements and so firms will be expected to comply regardless.

Role of technology

In addition, Mulholland argued that although the need to build new systems is currently a burden, she also believed that those firms which invest in good technology now are going to be well placed commercially going forward. Having this data management infrastructure in place may well put firms in a good position, both in terms of enhanced cybersecurity and in terms of informing their business strategy, she said, adding that it was one of the few positive conversations taking place around MiFID II. Murakami agreed that technology investment is going to give certain businesses a ‘huge competitive advantage’. For example, a number of Tier One banks are planning to hook directly into the APIs of the Approved Publication Arrangements (APAs), allowing their dealers to access the data and see a real-time spread of what is happening in the market. This will of course also benefit their customers in terms of improved data analytics, she added.

Downside to transparency

However, while he welcomed incoming changes such as fee transparency, Gahan warned that the initial impact of MiFID II will be negative on market participants, but will benefit retail investors. Murakami agreed, predicting that its impact in the medium- to long-term will be negative – and that regulation in general is making us more siloed, drying up liquidity and creating a challenge to the globalization of market access. While increased information and good transparency is a good thing, Mulholland added that liquidity and fragmentation is likely going to be a real problem. That will be extremely disruptive, she explained, especially with Brexit coming up on the horizon as well.

What should firms be focusing on now?

Gahan believed the most important thing the industry could do ahead of the implementation date is to prioritise the areas which are likely to be measurable come January 2018. Murakami agreed, adding that firms should document and evidence all their efforts to show that they made every human effort to comply. Firms should also be focusing their efforts on their high priority and high impact areas, according to Mulholland – both from the business and the client perspective. And in answer to his own question, Whelan added that prioritisation is key, as there is of course a lot going on. However, he warned that it is the hard, binary things which firms should be focusing on getting right. If the market infrastructure is not there, then that is not their problem. Yet ultimately there is no longer any reason to delay on implementing the operational and reporting components, he concluded.

We will be holding further MiFID II events in London, New York and Dublin – for an invite please contact

Blog, MiFID II:Articles

MiFID II Meetup: What to prioritise for the next 100 days

Following the success of our inaugural London MiFID II meetup in July, AQMetrics hosted a second event in late September to work through some of the key issues in advance of the 3 January 2018. The event once again brought together industry professionals in a relaxed setting to better understand where to focus MiFID II priorities, as we enter this critical final stage before the new rules come into force.

Our expert panel, Stephen Hanks, Alicia Mellon, Jacqui Hughes, Robert Adler and Breige Tinnelly launched the discussions by identifying some of the most common MiFID II issues facing firms. The panel particularly looked at those issues not making the headlines but nevertheless of pressing concern to many in the industry, including the regulators themselves. Moderator Breige Tinnelly, Head of UK for AQMetrics, began by asking what challenges are impacting firms’ ability to plan and successfully comply with the new requirements – and if the market is truly ready for MiFID II implementation?

Seeking clarity

According to Alicia Mellon, Regulatory Reporting Project Specialist, Vanguard, one of the main issues lies in transaction reporting, particularly around the lack of guidance on corporate actions, with many on the buy side struggling as a result. In general, this lack of guidance from the European Securities and Markets Authority (ESMA) has resulted in Vanguard developing new systems, with a third-party vendor, based on guidance from the Investment Association instead.

Another area the buy side is struggling with is unbundling of research. Jacqui Hughes, Senior Regulatory, Risk and Change Management Consultant, KPMG, warned that the market had been hesitant to make any decisions – again due to a lack of clear guidance.   Robert Adler, Director of Business Development, Storm IT Financial agreed that unbundling is still a very big issue for the buy side, based on his interactions with clients, as is transaction reporting.

Causes for concern

However, for the larger investment banks, there are four common issues raised regularly with the FCA around MiFID II, according to Stephen Hanks, Manager of MiFID Co-Ordination for the UK’s Financial Conduct Authority (FCA), namely:

  1. IT build – In particular, where parts of their systems must interact with some other piece of legislation it is unlikely that systems will be complete in time for 3 January 2018.   
  2. Pressures caused by policy uncertainty – There is also concern about vendors delivering on time as well as ISIN testing and whether ISINs will be registered on time.
  3. Trading venue readiness – Some venues are only expecting to able to provide new rule books in December and that certain new functionalities will only be added very late in the day. The buy side’s ability to cope with that is fairly limited.
  4. Complaints about their clients – The sell side has limited confidence in the buy side’s ability trade report and do not believe firms are on top of this issue.

So given only three months to go, where should firms be focusing their priorities?

According to Hughes, there is a notable divergence between the size of firm and its capacity for MiFID II. This is a challenge for the smaller firms considering a new level of transaction reporting must be underpinned by the right data and, in her opinion, most firms have not taken a strategic approach due to a lack of time, money and resources. Adler also warned about the implementation times quoted by vendors, such as the 60 days needed to install a fiber cable. He believes firms must be made aware of this and that they need to be able to show the regulator that they are at least in the process of putting new systems in place to meet the data requirements.  

We will be holding further MiFID II events in London, New York and Dublin – for an invite please contact


AQMetrics attains ISO27001 Certification

AQMetrics achieves ISO27001 Certification reaffirming commitment to data protection

DUBLIN, 7th September 2017.  

AQMetrics- Leading RegTech company, AQMetrics, today announced it has received  the International Organization for Standardization’s prestigious ISO / IEC 27001:2013 certification. This announcement assures the company’s customer base, which includes global financial services organisations, with some of the most demanding security requirements in the world, that AQMetrics has the controls in place to protect their data at all levels.

ISO27001 is the international standard for providing requirements for information security management systems. Organizations that meet the standard are certified compliant by an independent and accredited certification body on successful completion of a formal compliance audit. While all data transferred to and from AQMetrics has always been protected, this third-party certification differentiates AQMetrics as going above and beyond to ensure that AQMetrics cloud based software is delivered and maintained to the strictest information security standards.

“Organisations using cloud based software service providers have understandable concerns about security when choosing a vendor,” said Geraldine Gibson, CEO at AQMetrics. “For our customers, these certifications provide further verification of our utmost commitment to security and trust. This commitment is part of the reason why investment managers, asset managers, brokers, fund administrators and banks rely on AQmetrics cloud based software to know their regulatory risks and always be compliant.”

Claire Savage, Chief Operations Officer at AQMetrics, commented, “In today’s regulatory environment, financial firms need the assurance that any and all data they are entrusting to third parties is fully secure. Further, in terms of GDPR, we believe this certification is essential for our clients, as the regulation will require firms to demonstrate that their data is being managed in accordance with data protection regulations both within their own organisation and with any cloud based software service providers they use.”

About ISO/IEC 27001:2013

ISO27001 is the international standard for management, control and continuous improvement of information security management systems.  This International Standard has been prepared to provide requirements for establishing, implementing, maintaining and continually improving an information security management system. The adoption of an information security management system is a strategic decision for an organization.

About EU General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679) is a regulation by which the European Parliament, the Council of the European Union and the European Commission intend to strengthen and unify data protection for all individuals within the European Union (EU). The GDPR aims primarily to give control back to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. It becomes enforceable from 25 May 2018 after a two-year transition period.

About AQMetrics

AQMetrics is a leading RegTech company focused on delivering regulatory risk and compliance solutions for financial professionals. We recognized that the accepted methods of managing risk and compliance were slow, outmoded, and inefficient. We drew upon our team’s deep experience in innovation, technology, law, and financial services to build a platform that performed markedly better, helping our clients leverage technology to more efficiently meet regulatory obligations. The AQMetrics platform has been tested, proven and perfected.

More information is available at, or follow us on Twitter @aqmetrics

Media contact

Lorraine Toland

AQMetrics Ltd


MiFID II, MiFID II:Articles

MiFIDII ARMs and Systemic Risk: Time for the Penny to Drop

By Breige Tinnelly, Head of UK Sales, AQMetrics

The UK’s Financial Conduct Authority (FCA) is urging firms to make their final decisions about their choice of Approved Reporting Mechanism (ARM) providers soon and with very good reason. The new regulatory reporting requirements, which mandate reporting across a wide range of asset classes, impact this coming January with the implementation of MiFID II. For financial service firms opting to go with an ARM for their reporting requirements under MiFID II, choosing which vendor to partner with should be a top priority. So what are the main issues  to consider when selecting an ARM?

Expect the unexpected

Firms should recognise that the responsibility for ensuring they have resilient transaction reporting procedures in place ultimately rests with them, not with their vendor. In fact, the FCA has advised firms to factor in potential systemic, operational and even security risks when selecting third-party vendors including which ARM they choose.

The issue of systemic risk is often overlooked but needs to be considered. With just four months to go before final implementation, the FCA has expressed concern that too many firms are currently reliant on too few vendors in the market, some of whom hold significant market share for Regulatory Reporting.

Robust compliance

A number of market participants impacted by MiFID II share the FCA’s concerns.  Many are taking steps to mitigate the perceived risk by backing up their primary choice of ARM with an additional provider, to fulfil their reporting obligations. In the unlikely, but not impossible, event of major failure, firms should not expect that the regulator will take this into account when faced with a potential breach of compliance. The market impact would be far reaching, but even so the onus is still on the individual firms to demonstrate that their systems and processes were robust including their choice of third-party vendor.

In addition to the larger firms and asset managers looking to contract with both a primary and a back-up ARM, many are also looking ahead to what the post-Brexit scenario might entail, i.e. will they be impacted by not having passporting rights into the rest of Europe if they are solely reliant on a UK-based ARM? Some smaller firms may feel at risk of becoming just a number with a larger vendor and that in the event of any problems, they might not be the immediate priority. This is one of the key benefits of adopting a partnership approach to transaction reporting, which is made possible by opting for a primary and backup ARM.

Systems and safeguards

Of course, operational considerations are also significant in making an informed choice, including classification of what is reportable or non-reportable, exception handling etc. ultimately, knowing that what you are reporting is correct.  

The risk of non-compliance amounts to more than regulatory fines, it is your data, your customers and your brand that are at risk.  

At AQMetrics, our comprehensive solution encompasses an efficient user interface, automated data validation, data analytics and an approved reporting mechanism, to deliver economies of scale to our customers while still maintaining information and cyber security, data management, analytics and regulatory reporting. Whether acting as a primary ARM or in the role of backup ARM for regulatory reporting under MiFID II, firms choosing AQMetrics can rest secure in the knowledge that they are covering off the risk inherent with choosing a vendor and ensuring regulatory reporting compliance come January and beyond.



AQMetrics signs Appian and Macrosynergy

Providing support for AIFMD Annex IV reporting and CPO-PQR rules

DUBLIN, 22 August 2017

AQMetrics – the award-winning provider of regulatory compliance and risk solutions, today announced the addition of two new clients, Appian Asset Management Limited (Appian) and Macrosynergy Partners LLP (Macrosynergy), to its growing client portfolio.

Appian, a leading Irish based asset management firm managing a range of funds that invest globally, has selected AQMetrics’ solution for AIFMD Annex IV reporting. Macrosynergy Partners, a U.K. based discretionary global macro manager dedicated to providing competitive risk-adjusted returns to its clients, will adopt the AQMetrics automated reporting and filing system to ensure compliance with the CPO-PQR rules.

Geraldine Gibson, CEO at AQMetrics said, “Firms with multiple fund administrator relationships are moving to automated, independent solutions as these can yield greater operational efficiency with a single, golden source of data. We believe that our award-winning solutions will provide Appian and Macrosynergy with the right tools to meet existing reporting requirements and be better prepared for regulatory changes as and when they happen.”

Breige Tinnelly, Head of Sales, UK, at AQMetrics, added, “The financial services market is making operational improvements to existing reporting processes. With our cloud solutions we believe we can be an integral part of this, by helping firms meet these regulatory requirements quickly, easily and efficiently.”

As it continues to add enhancements to its risk management and regulatory reporting platform to meet evolving client needs, AQMetrics has received a number of industry accolades for delivering innovative products to financial professionals, including HFM US Technology Awards and HFM European Hedge Fund Technology Awards.

More information is available at, or follow us on Twitter @aqmetrics

Media contact

Lorraine Toland

AQMetrics Ltd




AQMetrics Second Annual “Women in Funds” Event

DUBLINJuly 18, 2017

Leading RegTech company, AQMetrics, today announced its successful second annual “Women in Funds” event, hosted in Berlin on June 14, 2017. As part of FundForum International, attended by 1,400 asset managers, fund selectors and distributors, AQMetrics, along with co-sponsors Brown Brothers Harriman (BBH) and FundForum, joined forces to bring together a growing network of senior men and women supporting the growth of the number of female professionals in the funds space.

With a 100% increase in attendance over last year, this year’s networking event saw an impressive 90% of female CXOs at FundForum attend with a notable increase in the number of middle and senior management participants and male attendees. A growing number of participants expressed an interest in leading Women in Funds initiatives at their own firms as well as in conjunction with AQMetrics.

“As an entrepreneur with over 20 years in the funds management sector, I’ve seen firsthand how talented female professionals are increasingly shaping and driving value across the industry,” said Geraldine Gibson, CEO of AQMetrics. “As a female-led firm, AQMetrics is honored to play an integral role in supporting and helping women succeed. The success of the second annual ‘Women in Funds’ event showcases the importance of the funds community coming together to promote the growing inclusion of women in senior-level roles.”

As the largest global investment management conference, this year’s FundForum International included presentations such as Manjula Lee & Baroness Verma: The bottom line with World Wide Generation and Gibson’s own panel discussion Fintech Innovation in Back Office and RegTech: A Showcase of Transformatory Ideas.

About AQMetrics

AQMetrics is a leading RegTech company focused on delivering regulatory risk and compliance solutions for financial professionals. We recognized that the accepted methods of managing risk and compliance were slow, outmoded, and inefficient. We drew upon our team’s deep experience in innovation, technology, law, and financial services to build a platform that performed markedly better, helping our clients leverage technology to more efficiently meet regulatory obligations. The AQMetrics platform has been tested, proven and perfected.

More information is available at or follow us on Twitter @AQMetrics

Blog, MiFID II:Articles

MiFID II: Addressing the Challenges Together

With the final implementation of MiFID II now a mere six months away, the time has come for individual firms to seriously consider how these rules will impact them and the daily running of their business. At AQMetrics, we believe this can best be achieved by meeting with your industry peers in order to discuss, share and collaborate to jointly find workable solutions for the myriad of issues this new regulation presents. And so, with this aim in mind, last week we held our inaugural MiFID II meetup in London, bringing together industry professionals from across the financial services industry in an informal setting.

Our first event also proved to be extremely timely, with the UK’s Financial Conduct Authority (FCA) having published its second – and final – policy statement only the day before. This latest publication sets out the regulator’s completed rules on key conduct issues, including research, inducements, client categorisation, best execution, the appropriateness test, taping, client assets and perimeter guidance. In addition, it also published a sixth consultation paper, which addresses a small number of residual issues, and finalised a number of ‘near-rules’ from its policy statement in March.

Tackling the issues

But speaking on the night, Lene Hansen of Bips Global warned about the importance of not just trying to put a ‘sticking plaster’ on the needs of the industry when it comes to MiFID II compliance. Instead, she urged businesses to take a holistic approach to meeting the needs of various financial firms and to reach-out more to utilise the skills available in our industry. Yet while the sell side appears mostly prepared for the implementation of MiFID II, buy side firms persist in keeping their heads in the sand, according to Jonathan Cowan from Calypso Technology. Best execution is also a big issue for most market participants, he added.
In fact, the implementation of MiFID II is proving massively disruptive for many on the buy side, TABB Group’s Monica Sommerville explained. She believes that the new rules are having the largest impact on those firms classed as systemic internalisers and that collecting new data will prove to be a challenge. For example, how can firms interface with other systems across different functions in their business? Representing the FCA, Stephen Hanks responded by reassuring attendees that the FCA are taking a pragmatic approach to firms who can demonstrate they have made ‘honest efforts’ to comply with the new legislation. He added that there are certain assumptions participants can make which will demonstrate they are genuinely trying to implement the necessary changes.
Sharing solutions

However, Hanks warned that while the FCA recognises the challenges faced by the market, it will still require firms to make reasonable efforts to comply. To help them with this, he said the FCA will be hosting a number of roundtables covering specific aspects of the new rules – such as transaction reporting, which it will cover in its Supervision Roundtable on 17 July. Responding to a question from Breige Tinnelly, he concluded that having an effective governance structure and culture in place will greatly aid firms in their implementation of MiFID II. In its policy statement, the FCA also urged firms to continue with their preparations for the application of the new regulation on 3 January 2018. By bringing together the MiFID II community and connecting people from the worlds of compliance, technology, financial services and beyond, AQMetrics hopes to add value to this process and help firms establish how to best prepare for the changes ahead.


AQMetrics Selected to Speak at RegTech Solutions for the Funds Industry

Breige Tinnelly as Head of U.K. Office to present on evolving RegTech landscape

Dublin, 26 June 2017: Leading RegTech company, AQMetrics, has been selected to present at the inaugural ‘RegTech Solutions for the Funds Industry’ on 28 June 2017 in Luxembourg. The conference, hosted by FinnoLux, Enterprise Ireland, and the International RegTech Association (IRTA) with the support from the Irish Embassy, will feature a panel of industry experts across the RegTech industry, including AQMetrics’ Breige Tinnelly, Head of Sales, U.K.

The breakfast seminar will be held at the Hotel Le Royal in Luxembourg and will show a first-hand picture of RegTech solutions and explore possible partnership opportunities for successful digital transition.

“This seminar is a great way to bring together leading RegTech companies and industry bodies to discuss all things RegTech,” said Breige Tinnelly, Head of Sales, U.K. “I am looking forward to showcasing AQMetrics expertise as well as hearing from other like-minded professionals.”

Attendance is free of charge, however as spaces are limited, registration is mandatory. You can register here:

About AQMetrics

AQMetrics is a leading RegTech company focused on delivering regulatory risk and compliance solutions for financial professionals. We recognized that the accepted methods of managing risk and compliance were slow, outmoded, and inefficient. We drew upon our team’s deep experience in innovation, technology, law, and financial services to build a platform that performed markedly better, helping our clients leverage technology to more efficiently meet regulatory obligations. The AQMetrics platform has been tested, proven and perfected.


The Regulatory Pressure on Funds for Data Accuracy

Speaking at this year’s Global Alternative Investment Management Conference (GAIM), Suzan Rose, chief compliance officer (CCO) at Marshall Wace North America, voiced the key Regulatory pressure facing anyone registered as CCO of an investment fund, even though many are not fully aware of it. Essentially, any CCO who submits false statements or omissions may face criminal prosecution. But how can funds ensure they are achieving the necessary levels of transparency and accuracy required by the regulators, and why is this process not always as straightforward as it seems?

Differing priorities

A key reason why this process is not always clear is that many portfolio managers view and understand their business in a different way than how they must report the information to the regulator. For example, if I run an equity portfolio, my key concern will be my net market position. I may have $1 billion in long equities, $900m in short equities and perhaps another $100m in derivatives. I need specific information to help manage my portfolio, my return on investment and my business as a whole. And yet when I come to report this data to the regulators, that same information is of little to no use to them.

Instead of a breakdown of longs, shorts and derivatives, regulators are ultimately only interested in knowing my overall total—my combined exposure of $2 billion. They’d also ask for the breakdown of all underlying exposures by security type, by country, etc. But in turn, these regulatory reporting standards and their requirement for reporting in terms of gross numbers actually means very little to a portfolio manager. Historically, reporting was completed manually in spreadsheets with your fund administrator, either internally or by hiring a lawyer or auditor to help put it together. So when the regulatory data is submitted, it is only the final numbers that are available to view and not the breakdown, what it’s comprised of or any verification of its accuracy.

Providing certainty

This of course poses a significant problem for CCOs/CFOs. If they are submitting information to the regulators but they can’t easily trace how these figures were reached, they have no real certainty that the numbers are good, accurate and verifiable. And again, if they are found to be incorrect, the fund and its CCO/CFO may have to face the serious financial, reputational and legal consequences of that failure. In the UK, the US and Europe, respective regulatory bodies now require all investment funds to register their business particulars, which includes having to name their CEO, CFO and CCO. This is still a requirement, even if your firm does not necessarily have this compliance function as a separate role. And with the introduction of new regulations aimed at the detection and prevention of fraud, the risks of a custodial sentence for reporting inaccurate information is now very much a reality.

By employing a solution tailored to help with the full range of reporting requirements, such as that offered by AQMetrics, funds can quickly and easily bridge this information divide. AQMetrics enables the CCO/CFO to drill down into the data so it is no longer just an unverified number on the page. The CCO/CFO can see the reportable, gross numbers and click on each to view the underlying breakdowns by securities, longs, shorts, by country—whichever way they best understand and read their data. Knowing how the reportable data aligns to the various components of their portfolio provides a welcome and invaluable level of comfort and certainty to anyone with legal responsibility for the management of a fund.


AQMetrics named one of the 50 hottest FinTech firms in Europe

AQMetrics is recognized as a top 50 fintech company in Europe.

Dublin, June 6th, 2017

AQMetrics –  Leading RegTech company, AQMetrics, today announced it has been recognized as one of the 50 European businesses who are transforming financial services Fintech 50 List.

In 2016 the organization was also named as one of the top 20 Irish FinTech companies and recognized as a Leading Global Fintech Innovator in the Fintech100 List published by KPMG and H2 Ventures.

As it continues to add enhancements to its risk management and regulatory reporting platform to meet evolving client needs, AQMetrics has received a number of industry accolades for delivering innovative products to financial professionals, including HFM US Technology Awards and HFM European Hedge Fund Technology Awards.

More information is available at, or follow us on Twitter @aqmetrics

Media contact

Lorraine Toland

AQMetrics Ltd




Achieving certainty of your Portfolio Risk Analytics with Open Protocol

By Ryan Kipp, Head of Sales Americas, AQMetrics

From rogue traders to hedge fund failures, Ponzi schemes to Madoff, it is little wonder that operational due diligence (ODD) has become such a vital component of the asset management industry. And with regulatory obligations only set to increase in the very near future, these evaluations will play a key role in improving transparency and accountability across the sector from investment managers to their investors. Yet, as many funds are still overly reliant on manual processes, such as the use of spreadsheets to monitor their portfolio risk, they really do need to adopt a more audit focused solutions instead.

Setting the standard with Open Protocol

These evaluations primarily exist to protect investors, ensuring all proper controls are in place and evaluating the fund’s portfolio risk. This has led to a growing push for greater adoption of the Open Protocol standard. Developed in 2011 in a bid to improve fund transparency and help investors aggregate their exposure, the Open Protocol template is a way of evaluating a fund’s portfolio risk and reporting that information in a standardised fashion. Open Protocol covers all major asset classes with counterparty risk and investor breakdown. It is structured in 3 Grades such that managers can provide the information at different levels of granularity (depending on their preference/comfort level). In May, the Hedge Fund Standards Board (HFSB) took on the role of co-chairing the Open Protocol Working Group alongside Albourne Partners, so the increased importance in the industry is clear.

However, if you’re a firm that has been historically receiving investments from family offices or other non-large institutional investors, you may not have needed a rating from an evaluator such as Albourne, Aksia or Cliffwater at all. But if you’re going to raise institutional money—such as pension funds, endowments etc., then these types of investors now typically require you to have a rating. And while a rating evaluates how strong a fund is, Open Protocol calculates and reports the findings. For example, Open Protocol might examine the Value-at-Risk (VaR) for the portfolio sensitivity to market changes, and stress tests for various scenarios, including catastrophic events.

Spotting dangers

Even if Open Protocol is not yet a regulatory requirement for your jurisdiction, it is likely to still be very high on your investors’ wish lists. By adopting an automated solution for the portfolio risk component of ODD, you can also ensure this is achieved in a secure, efficient and cost effective way.  For example, AQMetrics’ technology can provide Open Protocol reporting for your risk analytics. Additionally, we can enable alerts and automated reporting at the operational analyst level. You can then translate that information and put it out to board reporting, or you could put it out to investors for operational due diligence, helping you complete yet more pieces of your compliance puzzle.

We expect the Open Protocol to become increasingly adopted among investment firms, as the need for standards around evaluation of portfolio risks evolve.


AQMetrics updates platform for Form N Port

Form N Port

DUBLIN, June 1, 2017 /PRNewswire/ —

Leading RegTech company, AQMetrics, today announced new enhancements to its cloud-based platform. The updates will provide registered fund clients with updated forms, including Form N Port, and an advanced risk analytics and monitoring portal to ensure compliance with the Securities and Exchange Commission’s (SEC) new reporting regulations.

The new rules, which go into effect in June 2018, change several registered fund reporting requirements, including the addition of Form N-PORT, Form N-LIQUID and Form N-CEN.

“We are constantly evolving our RegTech solutions to meet the needs of our ever-growing client base,” said Geraldine Gibson, CEO of AQMetrics. “When the then SEC Chair, Mary Jo White, first introduced the concept of updated SEC reporting regulations for investment companies back in 2015, we got to work developing an industry-leading solution that will make complying with the new requirements as seamless, efficient and accurate as possible for our clients.”

Aimed at addressing the fund industry’s significant changes over the last twenty years, ranging from the advent of Exchange-Traded Funds (ETFs) to increased use of alternative strategies, the new SEC reporting regulations modernize and increase the transparency of registered fund reporting to enable investors to more accurately gauge and manage risk. Specifically, the new Form N-PORT, replacing Form N-Q, requires monthly portfolio holding reporting while the new Form N-CEN, replacing Form N-SAR, requires annual reporting of census-type information. Further, Form N-LIQUID promotes effective liquidity risk management for open-end management investment companies.

“Our platform updates and enhancements not only allow our registered fund clients to be confident in their ability to comply with the new regulations, but they go a step further – giving our clients access to robust risk analytics through the monitoring tool suite we’ve developed in tandem with the updated reporting mechanisms,” said Claire Savage, COO of AQMetrics. “When new reporting regulations, like the SEC modernization rules, come down the pipeline, we see an opportunity to not only ease our clients’ compliance burden but to actually offer them more insight into their fund performance.”


AQMetrics Continues Client Growth with Addition of Three Top Firms

DUBLIN, May 25, 2017 /PRNewswire/ —

Leading RegTech company, AQMetrics, today announced new relationships with Alcova Asset Management LLP, Colchis Capital Management, LP and Hibernia REIT plc. The addition of these three firms demonstrates the Company’s ongoing global growth as an increasing number of companies select AQMetrics’ award-winning technology to help meet their regulatory and compliance needs.

“We are delighted that our advanced technology solutions are being adopted globally by very large PLCs and banks through to small to medium-sized firms,” said Geraldine Gibson, CEO of AQMetrics. “Our goal is to consistently provide best-in-class risk, regulation and compliance services to each one of our clients. We look forward to working with our new customers to help them navigate the changing regulatory and compliance landscape.”

As the regulatory space becomes increasingly complex, AQMetrics continues to introduce new technology and solutions to help organizations mitigate risk and adhere to regulatory requirements. The addition of these three firms represents AQMetrics’ growing reach across various sectors in the financial services industry. Alcova is a multi-strategy quantitative hedge fund based in London. Colchis Capital is a leading investment management firm based in San Francisco and focused on specialty finance lending. Hibernia REIT plc is a Dublin- focused Real Estate Investment Trust listed on the Irish and London Stock Exchanges.

“As our client base continues to expand around the globe, I am especially thrilled to see the growing traction in the U.S following our entry into the market last year,” said Ryan Kipp, Head of Sales, Americas, at AQMetrics. “Colchis is a leading investment management firm here in the U.S., and the addition of this company to our impressive client roster reaffirms our growing stateside presence.”

About AQMetrics

AQMetrics is a leading RegTech company focused on delivering regulatory risk and compliance solutions for financial professionals. We recognized that the accepted methods of managing risk and compliance were slow, outmoded, and inefficient. We drew upon our team’s deep experience in innovation, technology, law, and financial services to build a platform that performed markedly better, helping our clients leverage technology to more efficiently meet regulatory obligations. The AQMetrics platform has been tested, proven and perfected.

More information is available at or follow us on Twitter @AQMetrics

Media contact
Caliber Corporate Advisers
Kristina Pereira Tully
+1-888-550-6385 ext. 5


Joining the Dots: The Value of an Integrated Approach to Risk Monitoring and Regulatory Reporting


By Geraldine Gibson, Chief Executive Officer, AQMetrics.

Regulatory reporting and risk monitoring are now, quite rightly, both considered high priority for most firms in the financial industry. Yet despite the growing reliance on quality data, analytics and insights to remain compliant in both of these areas, the tendency is still for them to be run on separate systems and monitored individually. In fact, firms that are still collating their data in this manner – instead of taking a unified approach – are not only making it more timely and difficult to respond to regulatory queries, but are also missing out on rich data insights which could prove beneficial to their business as a whole.

Even in terms of data reporting, regulatory bodies are increasingly focused on identifying risk. If your firm is then queried by the regulator about certain outputs, isn’t it much simpler to have one single, unified data system to consult rather than trying to contact multiple vendors? A central, ‘golden data’ source means all your information is available in one place, making responding to regulatory queries a far simpler task. Also, if you’re reporting through one system and calculating risk with another, then you simply don’t have all the dots joined-up to form valuable, rich data insights. But by unifying these systems, you enable additional insights which can then be used to develop more advanced analytics and risk measures.

Accuracy is assured

In today’s investment and asset management industry, being able to generate this level of reliable, insightful data is a must. Not least considering the range of current and upcoming regulatory requirements for this sector, including:

  • MiFID II and MiFIR;
  • The Alternative Investment Fund Managers Directive (AIFMD);
  • The UCITS Directive (UCITS V);
  • The SEC modernisation of fund management regulation, expected to be implemented in 2018.

And on the risk monitoring side, the ability to readily view where your market, credit and even enterprise risks are can be just as vital.

A further point to consider is that if you are still using multiple systems to populate your data, effectively you’re doing the work twice. Or if sourcing the data is a challenge, again you would be better off having one, single system. This enables you to more easily identify and plug any gaps in your data, which in turn helps remove the problem of inaccurate data. But by reporting data to the regulator from one system, and monitoring risk from another, you’re storing a different snapshot of data and cannot be as confident about its accuracy.

Speed and resilience

In addition to a growing focus on risk, new regulatory requirements are also mandating higher volumes of transaction data and more frequent reporting from individual firms. Therefore, the increased latency created by risk systems outside a single source may result in a delay in your frim being able to report. But by using a single source, the speed and efficiency of retrieving your data is assured. Furthermore, running multiple systems can also decrease your company’s overall resilience to cybercrime threats. By operating a single data source, you increase your information security and reduce your risk of multiple points of failure or attack.

So just how difficult is it to create this unified, golden data source? Initially of course, there is the task of retrieving all historical data and having it mapped to the single system. Yet following this one-off data onboarding, that system becomes the new working data source. The process is the same as any migration to a new system. At AQMetrics, we look at the risk level of each individual instrument and then correlate these at an asset class level, before comparing and reconciling them up to a portfolio level. And finally, having the data in one place allows us to view the links between different factors, such as geographic exposures or sector exposures. These are far more difficult to spot when working with spreadsheets or even on disparate systems. A unified, golden data source enables you to ‘slice and dice’ the information in a way that just isn’t possible without it.


AQMetrics Adds Legal Expert to Lead New U.K. Office

Breige A. Tinnelly joins RegTech Firm to continue driving growth within the U.K.

DUBLIN and LONDON, May 8, 2017 /PRNewswire/ —

Leading RegTech company, AQMetrics, today announced that recognized industry veteran, Breige A. Tinnelly, is joining the firm as Head of Sales, U.K. Tinnelly will oversee AQMetrics’ newest office based in London as the firm takes the next step in its ongoing strategic growth initiative.

Tinnelly’s hire combined with the firm’s growing number of locations reaffirm AQMetrics’ position as a leader in the RegTech space, dedicated to serving the robust global network of clients who rely on its award-winning cloud-based RegTech platform.

“As a former lawyer with a deep understanding of the needs of AQMetrics’ target market, Breige brings the exact expertise and experience we were looking for to lead the U.K. sales team,” said Geraldine Gibson, CEO of AQMetrics. “In opening a London-based branch, we are employing the proven expansion strategy that enabled our successful entry into the U.S. market. We are committed to continuing our energetic growth trajectory by adding domain experts and expanding our physical presence throughout the world, so that we can continue to meet our clients regulatory risk and compliance needs – wherever those clients may be.”

Tinnelly brings over 20 years of professional experience in law and financial services to her new position as Head of Sales, U.K. Prior to joining AQMetrics, Tinnelly served as Senior Vice President at U.S. Bank and as Vice President of BNY Mellon. Tinnelly was previously a Managing Partner at Carlingford Capital Ltd, an advisory firm providing consulting services to private equity funds and asset managers. Before moving into the financial services sector, Tinnelly practiced law in the U.K. with the firm Cleary Gottlieb Steen and Hamilton and worked at the New York-based law firm Felcher, Fox and Litner.

Tinnelly is AQMetrics’ most recent senior hire as the Company continues attracting top industry talent. In January the firm added Cathal Connolly as Head of Global Regulatory Reporting based in Ireland, and Ryan Kipp as Head of Sales, Americas, based in the U.S.

About AQMetrics

AQMetrics is a leading RegTech company focused on delivering regulatory risk and compliance solutions for financial professionals. We recognized that the accepted methods of managing risk and compliance were slow, outmoded, and inefficient. We drew upon our team’s deep experience in innovation, technology, law, and financial services to build a platform that performed markedly better, helping our clients leverage technology to more efficiently meet regulatory obligations. The AQMetrics platform has been tested, proven and perfected.

More information is available at, or follow us on Twitter @AQMetrics

Media contact
Caliber Corporate Advisers
Kristina Pereira Tully
+1-888-550-6385 ext. 5

MiFID II:Articles

MiFID II: Time to Tackle Transaction Reporting in Detail

By Steve Barnes, VP of Technology, AQMetrics.

Following the recent changes to mandatory transaction reporting (TR) being introduced under MiFID II, there are now a number of vital new reporting obligations which the markets must rapidly become familiar with. Yet as was revealed by a recent webinar I took part in on TR data and data management challenges, it was clear that the industry is hungry for additional clarity and detail around the specific changes to these reporting requirements.

Scale of the challenge

A particularly concerning point for firms, which I covered in the webinar, involves the new set of reporting fields and the potential difficulties involved in extracting this data from their existing systems. For example, general fields will require extra steps in an ETL process to continue to ensure the quality of the data. There is also an emphasis on the mandatory use of Legal Entity Identifier (LEI) codes. In the case of the buyer and seller fields, all legal entities will need to be referenced against a global LEI database before submitting to the regulator – or the report will fail. This requires extra due diligence to protect the data quality.

In the case of the buyer consisting of an actual person, details such as their first name, last name and date of birth may need to be obtained from the human resources department. A firm’s internal systems may never have had to interface with HR before and, depending on the size of the organisation, the data may also be in siloed systems. This might involve developing a data programme to get these systems working together. Accessing these systems may take a longer time than firms initially expect, which is especially worrying for firms that have not started the process yet.

Additional considerations

Furthermore, the addition of OTC derivatives has complicated matters further in relation to data fields. This is mainly due to questions around how to classify OTC derivatives under the ISO data standards. The algorithms needed to differentiate between decision maker and executer, alongside additional challenges indetermining where to apply the pre-trade waiver to commodity derivatives are proving a certain level of complexity exists above and beyond that seen under MiFIDI. Sourcing the data can also be problematic, particularly if the systems have not interfaced to before, or if they have not been updated for some time.This will ultimately prove to be a key data reporting challenge for most firms.

Webinar participants were also interested in the potential impact of the incoming General Data Protection Regulation (GDPR), due to come into force in May 2018, and the wider data protection issues raised by the mandatory collection of data about individuals. In terms of details such as names and date of birth being required then they ought to be protected by existing data protection rules. In terms of third-party data through an Approved Reporting Mechanism (ARM), then ARM service providers will need to have a GDPR policy.

Effort that pays

Overall, data quality is key to most of these requirements. For example, AQMetrics uses programmatic regulatory control checks to ensure the data quality meets the required standards before submitting to the regulator. These checks are relatively simple for certain numerical fields, dates and country codes,  but problems can arise when the data is unstructured such as names or passport details. The source system data may originally be of poor quality for historical reasons. As a result, performing a data quality exercise on the existing systems before data gets channelled through for transaction reporting is essential. Data control is especially key under MIFIR. Moving from manual systems, such as records held on excel spreadsheets, to more automated systems may involve a third-party who can implement better auditing and governance processes.

AQMetrics offers a full range of risk and compliance solutions for MiFID II transaction reporting. AQMetrics is authorising as an ARM under the Central Bank of Ireland and plans on passporting its MiFIDII transaction reporting services to regulators throughout Europe . Firms tend to find that once their TR is being correctly implemented, then the benefits for getting MiFID II right go further than just regulatory compliance. It is very useful for firms to have a single view of the data they are collecting, where is came from and knowing the limits of their systems. This data can then be used elsewhere in the organisation. But the main takeaway I hope practitioners gained from the webinar was simply to not leave updating their systems for the new requirements to the last minute. Many of the necessary changes may be much bigger and more expensive than initially expected, so it really does pay to start early.

The full webinar recording: “MiFID II: Data for transaction reporting” is available here.

Webinar link:


Cyber Security

Cybersecurity Risk and the Need for a Holistic Approach

By Lorraine Toland, Business Development Representative, AQMetrics

Cybersecurity threats are now high on the list of risk mitigation priorities for most firms and institutions – and if not, then they certainly should be. In addition to the reputational damage an attack can cause your firm, it is now widely recognised that they can also wreak serious financial damage, which in turn can negatively impact your investors and shareholders. Furthermore, cybersecurity must now be viewed in relation to all other operational risks. Yet despite the consequences of cybersecurity breaches and the growing regulatory impetus to consistently monitor, as well as evaluate, risk management processes and have a holistic register in place, this is not yet ingrained in the culture of most firms. But change may well be on the horizon.  


Outdated methods

The Central Bank of Ireland (CBI) recently highlighted the need for most firms to radically improve their approach to risk monitoring. Since 2015, the CBI has been carrying out onsite thematic and targeted inspections of various firms’ cybersecurity provisions. The concerning issue it has uncovered is that the risk registers in most institutions are completely outdated, of poor quality and are still being updated manually ie, on spreadsheets. In addition, it believes that firms shouldn’t be monitoring cybersecurity in isolation but should instead view it in the context of their wider IT security, business continuity planning and risk management strategies.

The CBI’s findings provide a timely warning to the industry in general, particularly in light of recent high-profile failures and the increasing emphasis from global regulators that firms must adequately monitor all risks. Most regulators and inspectors, for example, require all staff – including board members and non-executive directors – to be aware of what is in their risk registers. It is also important to know that your firm would be required to provide regulators with all necessary documents, which may include your meeting minutes, system logs, user access logs, policies and procedures etc. Yet as the CBI discovered, there is often a noticeable lack of technical knowledge, particularly at board level. To remedy this, the CBI suggests having best practice workshops to strengthen the technical awareness of your board members. 

Standardised and understandable

In addition, when you are initially capturing your operational risk data it is vital to ensure that this information is captured consistently across your whole organisation. This then radically simplifies the process of aggregating all your risk information from across different departments, or even different groups. But instead we still find many firms are trying to manually aggregate large volumes of data from a variety of different spreadsheets in different formats, then trying to formulate this into a meaningful report.

But how can your firm achieve consistent data capture efficiently and ensure it can provide meaningful insights into your risk exposure? To this end, the National Institute of Standards and Technology (NIST) has produced a recommended framework and methodology, consisting of five requirements for firms to use in the cybersecurity processes. This is intended to provide a common language for understanding, managing, and expressing cybersecurity risk, both internally and externally. The five core functions are:

  1. Identify: Develop the organisational understanding to manage cybersecurity risk to systems, assets, data, and capabilities.
  2. Protect: Develop and implement the appropriate safeguards to ensure delivery of critical infrastructure services.
  3. Detect: Develop and implement the appropriate activities to identify the occurrence of a cybersecurity event.
  4. Respond: Develop and implement the appropriate activities to take action regarding a detected cybersecurity event.
  5. Recover: Develop and implement the appropriate activities to maintain plans for resilience and to restore any capabilities or services that were impaired due to a cybersecurity event.


Weight of responsibility

These five requirements can be used to help identify your governance procedures, formulate a risk management strategy and then to also run formal risk assessments in-house to review your risk register and how successfully your data is being recorded on an ongoing basis. Having an automated, fully auditable risk register will further strengthen this process. For example, AQMetrics offers single cloud-based platforms which enable firms to capture their risk in a consistent and controlled way across their whole organisation. This also provides full auditability, playback capability and all workflows all accessed from a single platform, so it is all in one place.


Ultimately, being able to effectively monitor all risk across the board is now vital: from market and credit risk through to business continuity planning (BCP) and third-party vendor risk. With upcoming regulatory changes, such as the implementation of the General Data Protection Regulation (GDPR) next year, having a holistic view of all your risks is also beneficial for demonstrating to regulatory bodies that your firm is indeed meeting its requirements. In addition, it provides an additional level of comfort for your investors that not only are you capturing all of your risk, but you are in fact ten steps ahead. Of course, some firms opt to outsource much of this risk capture to third-parties instead but this can often create additional, unintended risk. You can outsource your risk but not the responsibility – the onus remains on your firm to ensure you have an adequate risk register in place and that risk mitigation is truly an ingrained part of your business culture.


MiFID II, MiFID II:Articles

The capture and release of wild data under MiFID II/MiFIR

By Steve Barnes, VP Technology

Wild data is roaming about your organisation. The new Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR) will demand you round it up, process it and release it as trade and transaction reports.

The rules will apply from January 2018 to European Union firms, their branches outside of the European Union and financial institutions operating in the EU. Nearly all instruments are subject to the new regulation and directive, where under MiFID I only equities and exchange-traded funds were affected. Over-the-counter (OTC) trade reporting has been captured within the organised trading facility (OTF) and multi-lateral trading facility (MTF) frameworks, where MiFID I only affected trading of instruments on regulated markets (RMs).

Trade reporting will make public information including volume, price and time of execution via an Approve Publication Arrangement (APA). Transaction reporting to authorities is more substantial and must be conducted via an Approved Reporting Mechanism (ARM).

The increase in data fields for the purposes of transaction reporting under MiFID II – from 24 to 65 – multiplied by the increased number of instruments and range of trading involved gives an indication of the greater complexity of data that will need to be managed.

Pulling data together so that it can be normalised takes considerable effort. In the report by analyst firm Aite Group entitled, “Reconciliation Trends in 2016: Regulation and Nervous Recs”, it was estimated that it takes nearly 65 days to develop and build a single new reconciliation.

Investment firms need to understand how and where to report data, then take the operational steps to make it happen. Collectively, these requirements add up to massive project to aggregate and report data.


Get it together

Step one is identifying where this data is generated, if it is already captured and if not how to capture it. Some of the new additional data – for example unique identifiers for traders, such as national ID number – may never have been captured and stored before. The risk around storing data of that granularity is considerable and may well require a review of data security measures.  

Transforming that data into the right format to report, via extensible mark-up language (XML) offers further operational challenges, with new data required than before, and certain reporting not having been needed under MiFID I.

The second step will require firms to develop in-house capabilities that they have not had before. They will need to build test harnesses, then build the platforms, harnesses, testing systems, and the silos. This will require a full technology build-out, setting up a rock solid system that can report to the regulator.

For trade reporting, APAs have a five-minute window, near real-time, in which to take on the trade, pass it to the regulator, receive a response and pass that back to the system to determines whether it has been accepted or not. For high volumes of trading that could create real challenges around data latency. A system failure or a slowing down of processing will lead to challenges in fulfilling obligations. Any system built to handle reporting will also need to be able to scale in order to manage this workload.


Working the system

The key to handling data at scale is the capacity to tag and reuse it. A smart method of handing that process is using EXtensible Markup Language (XML). It handles the multifaceted nature of the data by managing the many relationships that pieces of information have with one another. Every aspect of the trade is tagged which allows it to be handled by different parties according to their needs.

From an internal perspective, if a firm is warehousing this information it can map fields to tags in the XML, and then run programs – typically Java-based applications – to the XML file, and then run a schema validation. The European Securities and Market Authority, the Financial Conduct Authority and the Central Bank of Ireland will all provide an XML schema to validate it the data.

This creates a massive advantage for firms that employ the technology because the XML file that they have created can be validated and if it comes back with no errors, can be sent to the regulator, with near certainty that it will be good, or nearly good.

Using technology effectively in this process allows a firm to round its herd of data up and brand it, so that the business can be certain of what it has and does not have, removing a massive amount of cost and complexity from the validation process.