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AQMetrics named on H2 Ventures and KPMG’s 2016 Fintech 100

emerging-stars

AQMetrics is thrilled to be recognised in H2 Ventures and KPMG’s 2016 Fintech 100 – the list of the world’s leading fintech innovators for 2016!

The Fintech 100 features the world’s leading 50 Established Innovators, and the 50 most intriguing ‘Emerging Stars’. The list is the result of a global search and includes 35 companies from the Americas, 28 companies from EMEA, 13 companies from the UK, 14 companies from Asia and 10 companies from Australia and New Zealand.

The full list has just been made public and is available at www.fintechinnovators.com.

 


Blog, MiFID II:Articles

Reflections from a RegTech Masterclass

By Geraldine Gibson

I recently had the privilege of speaking at a ‘RegTech Masterclass’, hosted by Burges Salmon in London, where top of the agenda was the subject of MiFID II. This is perhaps not surprising, given that MiFID II impacts so many areas across the financial markets industry, touching every part of the trading logistics chain: from front, through middle, to back office; including pre-trade, at-trade, post-trade, risk management, clearing and settlement. Which means that, if firms are to be fully compliant, system overhauls are likely to be inevitable in some areas.

Consistency of trade-related data

It became clear from the discussion that one area where firms are planning significant changes to their systems is around maintaining the consistency and granularity of trading data.

The reason for this is that under MiFID II, more data points need to be captured and tracked throughout the lifecycle of the trade. The trader ID code for example, which is generally tagged in the original FIX message in current environments, is often not tracked onwards through settlement and accounting systems.

Under the new regime, this could cause a number of problems for firms when conducting any kind of post-trade monitoring, particularly in situations where trades have been allocated & settled and positions rolled. This is where RegTech steps in. Through RegTech the technical solutions to meet the complex granular regulatory requirements of MiFIDII are readily available over the cloud at the touch of a screen.

Algorithmic Trading and DMA

Another topic that came under discussion was the prospect of sell-side DMA (Direct Market Access) providers being increasingly disintermediated under MiFID II.

In recent years, the buy side has generally relied on execution algorithms and DMA provided by their brokers or their banks, typically exchange members. But under MiFID II, there is increasing scope for the buy-side to bypass their brokers, if they have their trading systems and exchange memberships set up appropriately.

It is not clear yet whether this will become a trend. But buy-side firms who do follow this approach will not only need to take ownership and responsibility for their trading infrastructures (rather than relying on those provided by their brokers), but from a MiFID II compliance perspective, they will also need to have the necessary systems and controls in place to prevent those systems from disrupting the market.

Simplifying regulatory complexity

One topic that was actively discussed was how firms could go about simplifying cross-jurisdictional regulatory complexity. On top of MiFID II, every national competent authority will have its own regulatory documentation that firms must comply with, so what can firms do to better understand that documentation, and ensure that their systems comply with the regulations not only of their own jurisdiction, but also of other countries and regions where they do business?

The answer is simple. Let the machines do it.

This is where AI (Artificial Intelligence) and natural language understanding come in. Machines can be programmed to perform language matching, using fuzzy logic to find where specific words and phrases prevail in a document. They can then bring back the results into a nice dashboard for the end-user, giving the ability to see across all jurisdictions (for the venue they’re trading on or the instrument they’re trading), which regulations or which parts of MiFID II they have to comply with, and how.

Risk control in the spotlight

The general consensus was that greater supervision is becoming the trend, and technology can help greatly with that. The regulators are keen to get rid of manual data intervention, and want to remove the heavy reliance on spreadsheets for reporting and compliance, where there is too much scope for manual error.

Greater automation will lead to greater auditability. Having the right regulatory technology in place will enable regulators or compliance staff to go to a specific point in time to see what a piece of data looked like when they need to, and given them far greater certainty that the data is correct.

The over-riding conclusion of the masterclass was that RegTech is only going to become more important. It is likely to be the enabler for instilling and maintaining a culture of good conduct and control across the organisation, which in turn translates not only into better regulatory compliance, but more importantly, into good governance.


Blog, MiFID II:Articles

The Internationalization of Regulation

International Regulations

Part One: What It Means for US-based Asset Managers

Business Today is Global – But Regulations Are Still Local

When it comes to doing business, country borders no longer serve as the restrictive boundaries they once did – financial regulations, however, tell an entirely different story… A story of differing rules and requirements for each country that is very slowly evolving to find ways to better address the internationalization of financial firms.

In this two-part series, we will take a closer look at what this ‘internationalization of regulations’ means for US and UK-based asset managers.

US-based with Global Aspirations

It’s no secret that many asset management firms that once focused solely on the US are now stretching their reach overseas as they seek to become global organizations.

In a recent speech at the Investor Regulation Conference in London, SEC Chief of Staff, Andrew Donahue stated, “the number of investment advisers registered with the Commission that have their principal office and place of business outside the U.S. has increased nearly 150% over the last 13 years, while the amount of corresponding regulatory assets under management of those foreign advisers has more than quadrupled during that time to $8.7 trillion .”

This type of international growth requires global cooperation amongst regulators across borders, to ensure proper compliance rules are in place for the benefit of investors and funds alike.

International Regulations – A Reality or A Dream?

A few key things remain consistent regardless of regional boundaries. Regulators across the globe are placing increased focus on the following types of risk:

  • systemic risk
  • liquidity risk
  • leverage risk
  • operational risk
  • cybersecurity
  • fraud

Donahue remarked on this in his speech, stating, “Although the progress in, and benefits from, international engagement are significant, more still needs to be done. Our increasingly complex and integrated markets demand no less. This need is particularly prevalent with respect to regulatory risks that transcend borders.”

While these concerns indeed transcend borders, there are different and often competing priorities depending on the region. One example of this is how European regulators are ahead of their US counterparts when it comes to a focus on creating regulations targeting alternative investment managers under AIFMD. In contrast, the US is ahead of Europe when it comes to the country’s focus on Money Market funds and Fixed Income swaps.

There is a sea change occurring today as regulators are looking beyond their backyard to see what other countries are focusing on in an effort to align priorities to minimize systemic risk globally.

What Does This Mean for US-based Asset Managers?

As regulators take pages and chapters out of each other’s books and we see an emerging international regulatory framework, asset managers will need to be nimble and able to adapt to changes both within and outside of their own borders.

US-based asset managers that market or manage funds in Europe are not always aware that they need to comply with regional regulatory requirements, putting them squarely in the purview of regional officials.

Let’s say for example that a US-based firm manages funds in Sweden. They often do not realize that they need to comply with Swedish regulations and report on their AIFs to the Swedish regulator. That is until they receive a letter from the regulator asking them why the hundreds of data points required for Annex IV reporting have not been submitted.

This is not just headache to pull together the necessary data and documentation but there is a language hurdle at play as well. A compliance partner with regional expertise that can leverage technology to compile the data points and translate the proper documentation into the right language plays a key role in solving the concerns of both the regulator and the firm in question.

Though this is just one example, with MiFID II coming into play in 2018, US-based asset managers that conduct business in Europe will need to be nimble and able to adapt to this changing sea of regulations across every border in which they operate.

What’s Next?

As regulators around the globe focus on better compliance monitoring and investor protection, there is no doubt that the next step will involve regulators reviewing the systems that asset managers use to meet relevant regulatory requirements.

US-based firms need to be ready to prove that they have all relevant regulations covered within every country in which they operate. Donohue remarked in his speech on the importance of, “lay[ing] the foundation for a modernized regulatory regime.”

The modernization of regulatory regimes has been a trend in Europe dating back to 2008 even if it’s only become a more recent trend in the US. Between the modernization of regulatory regimes and a greater global focus on pre-trade compliance and oversight of technology, it is clear that the next wave of regulatory focus will be on the systems used to meet emerging regulations and reforms. US-based asset managers need a modern, cloud-based solution that acts as an expert in regional regulations – translating what cross-border regulations mean and how a firm can meet all relevant requirements.


Blog, MiFID II:Articles

Transforming Regulatory Compliance with Artificial Intelligence

By Geraldine Gibson, CEO, AQMetrics

Artificial Intelligence in RegTech

Artificial Intelligence (AI), long the subject of science fiction, is now becoming more and more widespread and is seen as an increasingly important computer science across multiple industries. In Financial Services in particular, Machine Learning and Natural Language Processing is increasingly used today to make sense of big, complex data in a wide range of areas.

One such area is regulatory compliance. The use of AI – particularly Natural Language Understanding (NLU), a subset of Natural Language Processing – can help firms to realise a number of benefits, including improving the speed and efficiency with which they achieve compliance, and making that compliance much more robust.

The Challenge of Interpreting Regulation

As we’ve seen over just the last couple of years with the introduction of MiFID I & II, UCITS, AIFMD and the like, there is a constant stream of documents being issued by regulators, which can each run to hundreds, or even thousands, of pages. Wading through those documents and trying to pick out the pieces that are important so that appropriate rules can be built, code can be written and reporting systems can be automated (for example), is an onerous task for human beings.

In order to achieve compliance, many regulated firms take the approach of partnering up with third party consulting firms, paying large sums to them to help interpret the regulations, employing people to write up what everything means from a rules perspective, then attempting to code those rules into their systems.

This process is both operationally inefficient and unnecessarily expensive, when compared with using Artificial Intelligence from the very beginning of the process.

Today, AI can be – and is being – used to interpret regulations, to comprehend what needs to be done from a technology perspective, and then to codify the necessary rules. Those rules can then be automated into the relevant reporting and risk systems to make sure that the firm is not only staying compliant but also better managing its risk.

Natural Language Understanding

The key element here is the use of NLU, which is the component of natural language processing that reads – and more importantly interprets – text. By automatically translating the written regulations as they come out into usable code, NLU offers the benefits of bringing down the cost, the effort and the timescale of interpreting and implementing new and updated regulations.

Putting this into practice, we have worked together with our clients to develop a Regulatory Risk Analysis module based around NLU. This module takes in multiple sources of data from various business units and interprets it into a common language. That common language is then used to analyse and aggregate the data, distributing it back into one single, holistic view of risk across the organisation, which can then be analysed using various factors.

This approach, where all the risk factors are stored, analysed and fully assessed using machines, substantially increases the probability of the firm being compliant because it does away with the risk of cognitive bias, i.e. the risk that a group of compliance or risk officers come up with subjective and inaccurate rules regarding what they think the system should be doing, and maybe miss something.

Of course, risks will always exist. However, what this AI approach does is ensure that every ‘i’ is dotted and every ‘t’ is crossed during the risk assessment process.

Greater Speed, More Accuracy, Lower TCO

Although there are various different approaches to ensuring regulatory compliance, the whole process can only be fully optimised if AI is included in the journey.

By adopting platforms with AI at the very beginning of the process, with NLU taking the emerging regulations in and transforming them into a technological solution, firms will not only gain the speed, the efficiency and the accuracy that is needed to meet emerging regulations, but they will also hit regulatory deadlines – which otherwise can be quite challenging – and do it all at a lower total cost of ownership and with less overall risk than is otherwise possible.

 

 


Blog

What is RegTech

‘What is RegTech?’

That is the question that many people ask when they hear that AQMetrics is a RegTech company. So we’ve decided to share what RegTech means at AQMetrics.

RegTech is technology that helps people comply with their regulatory obligations. AQMetrics RegTech is a utility that uses a range of legal, technical and business skills to create well designed software based on algorithms, data analytics and machine learning.

Why is AQMetrics a RegTech company rather than a boutique consultancy firm?

Given the deep financial services software background of the AQMetrics management team and with over 100 years between them in the regulatory risk and compliance trenches at Tier 1 banks, it is not surprising that people often ask why AQMetrics is not a consultancy firm.

For us it is all about creating exceptional customer experiences whilst sharing total costs. After a slew of global financial services regulations, it is no surprise that in recent years compliance costs have increased significantly for firms. As a result, firms are stretched to monitor compliance, to understand emerging regulations and to interpret more and more data. As all firms are faced with the same regulatory challenges AQMetrics decided that it was time to change the status-quo. As costly lawyers and specialist consultants traditionally charged by the hour to provide each firm with effectively the same solution, AQMetrics takes a different approach. Taking requirements from a multitude of customers AQMetrics provides one single best in class utility to all at a shared cost.

Why is Artificial Intelligence part of AQMetrics RegTech Strategy?

AQMetrics utility analyses large volumes of data through real-time surveillance and predictive modelling to detect suspicious activity and potential breaches of financial services laws. This coupled with machine learning means that AQMetrics compliance algorithms become more powerful over time so that our customers don’t have to rely on pre-programmed indicators of non-compliant behavior. AQMetrics algorithms use statistical analysis to self-adjust, picking out the truest predictors of risk. The truest predictors of risk are not always the most obvious ones.

Why a collaborative ecosystem is key to the success of RegTech?

AQMetrics automated workflow has built automated controls into operations across our customer base, so that processes or transactions that could result in a breach of certain regulations or policies are effectively controlled and reported. This is only possible through collaboration and integration with partners in the ecosystem. One example is AQMetrics pre-trade compliance rules engine that determines whether a trade can be entered for execution. For pre-trade compliance AQMetrics real-time access to Bloomberg data ensures that prices are always up to date in a portfolio on the AQMetrics platform. Marrying real-time market data with a library of rules means that if an order is deemed compliant, AQMetrics can automatically submits the trade for execution. If the transaction is rejected, then AQMetrics automatically terminates the order until an end user takes appropriate action. Another good example is AQMetrics EMIR reporting partnership with the DTCC. Through real-time APIs derivative contracts are seamlessly reported from AQMetrics to the DTCC for EMIR reporting.

RegTech can do so much more than save on costs

In conclusion, at AQMetrics we don’t view RegTech as simply a means to automating compliance processes currently completed by staff manually. AQMetrics sees RegTech as an enabler of a utility that provides a friction-less and enjoyable customer experience from beginning to end.


Blog

What is this SaaS thing?

We were recently surprised when a customer asked us

‘What is this SaaS thing you keep referring to in meetings, in your online help and on your social media sites’.

So, we have decided to share our view of SaaS and why, in our view, it is great that aqmetrics is a SaaS company.

What is SaaS?

SaaS

Before we jump into the definition of SaaS, let’s deal with some basic jargon first. There is the ‘cloud’. In short, we connect with hosted online services to store and manage data. These hosted online services are our ‘cloud’.

Our applications are stored online in the cloud. Our customer’s data is stored online in the cloud. Our analytics and workflow are managed in the cloud. We list our solutions online and our customers ‘rent’ our software from our cloud location. This renting of aqmetrics software from the cloud is what we refer to as our Software as a Service (SaaS) offering.

Why is being a SaaS company great for aqmetrics customers?

Renting takes one form at aqmetrics – usage based subscription. Business pay a fee for the aqmetrics service based on their service usage. We offer plans with several tiers for ultimate flexibility. We also offer a fixed price for anything that goes above our top tier level. Our customers tell us that they gain considerable economies from our usage based subscriptions.

As our customers rent our software, the upkeep of the technology, maintenance, repairs, and upgrades all falls under aqmetrics remit and saves our customers time and money. Renting software eliminates the need for large technology teams.

Furthermore, because we offer regulatory technology (RegTech) our customers don’t have to employ large teams of lawyers to interpret rules and regulations. That heavy lifting is done by aqmetrics legal counsel. Our legal counsel reviews existing and emerging regulations alongside our technologists. Together the blended aqmetrics team build scalable software for existing, new and emerging regulations. The cost of regulatory change has significantly reduced in our customer’s organisations thanks to aqmetrics unique approach to blending legal and technical analysts to build the best products.

Our customers can access the software they rent from anywhere in the world and log their workflow progress as if using software installed in the office. Before cloud computing, typically only “lite” versions of office resources could be accessed remotely. Now, all heavy lifting happens through aqmetrics infrastructure, delivering an ‘in work’ like experience point-to-point.

Then there is the Business Continuity that is guaranteed through renting software as a service. An IT crisis in the office cannot affect aqmetrics cloud technology. If software services crash on one host, the aqmetrics service continues to run. Only the device impacted by the crash disconnect. This makes failover to another backup software service seamless and easy, whilst invisible to the end users of aqmetrics services.


Blog

Farewell Black Swans

Know Your Exposure. Be Prepared.

Do you know where your firm’s risk is concentrated? In this blog we examine how can you better make your risk culture understood from the top down and reported accurately from the bottom up.

Firstly, at an operational level, do all of your business units have a consistent view of the combined risks concentrated in their area? Do operational teams provide the input in to the Risk Register in a simple to use business application? Does your risk assessment tool allow for expert judgement to be captured for the qualitative risk assessment? Is each business unit a key participant in the risk management workflow?

Secondly, at a supervisory level, is there a holistic view across business units? How does the risk heat map look for the business? When should capacity and resources be assigned to risk control? What should be reported up to board level for escalation? Do you have a configurable tool that matches your firm’s business operating model?

And ultimately, at a board level, is the board aware of the risk concentrations that may impact the firm’s business reputation and core strategy? Are capital expenditure, mitigation, effectiveness and continuity plans acceptable? Does the board have assurance that risk is managed beyond superficial reporting? Is adequate information available to the board to facilitate knowledgeable discussions and highlight the top three ‘big bets’ and ‘key exposures’?

At aqmetrics we’ve a five step best practice approach to risk aggregation:

1. Consistency: At present, you may have one team capturing risk one way, and another team doing it another way. That won’t work. How can you aggregate risk at a firm level if there is no consistency in the risk capture at the business unit level?

You need to capture and assess all risks in a consistent manner. Disparate risk systems lead to data inconsistency that impacts your overall organisations risk assessments.

2. Concentration: Pooling risk assessment and creating a heat map gives you a full picture of where your vulnerabilities lie. There is a trend among risk professionals, regulators and compliance staff alike to assess risk concentration in line with current and emerging regulations.

3. Accountability: The solution involves integrating your company’s mitigation and action plans using a workflow model aligned to your business. Each business unit should be accountable for risk management in a non-superficial way.

Individual risks may not escalate to board level. However, when risks are pooled and organisational impact as a whole is assessed and managed via an auditable workflow, we move from passive risk management to active risk control. Board communications then become streamlined, simplified and above all accurate.

4. Appropriateness: Risk tools should support qualitative analysis in a predictable manner, while also providing quantitative analysis where required. They should be proficient in using statistical analysis to support both capital and strategic expenditure decision making. Qualitative analysis should be clear, understood and transparent, but quantitative should be used with caution and only for specific subset of risks.

5. Assurance: Any solution should have the capability to call, recreate and produce a full audit trail in the event of an internal or regulatory inspection. This is a necessity.

There is no escaping the fact that regulation and compliance touches every part of your firm. Yet regulations can be increasingly complex and overlapping. Consequently, asset managers having a growing need for a systematic approach to aggregate risk within evolving regulations (EU AML Directive V, MiFID II) and emerging regulations (Cybersecurity, GDPR, IT resilience).

The combined business impact of these regulations must be measured and managed in a consistent, transparent manner with accurate and timely reporting at an operational, supervisory and board level.

After-the-fact ‘black-swan’ assessments will no longer be acceptable.


Buzz

WomenInFunds first network event a huge success

#WomenInFundsOn 7th June, as part of FundForum International, AQMetrics launched the #WomenInFunds network. This year over 1,400 investment managers, intermediary investors and innovators attended Fund Forum International of which just 15% (approx 200) were women.

A recent Wall Street Journal article stated that only 9% of fund managers are women. And so, to help support and boost that figure, #WomenInFunds was born. The first event was held in the Waldorf Astoria hotel in Berlin on Tuesday 7th June 2016.

The cocktail reception was a huge success with 60 women from across the funds industry represented. They included global business heads, company founders, chief risk officers, portfolio managers, legal and compliance experts as well as industry consultants.

Geraldine Gibson, our CEO, introduced the event and Jenny Adam, Editor-in-chief of FundForum also said a few words. Claire Savage, our COO also attended.

New #WomenInFunds initiatives

FundForum and the Chartered Alternative Investment Analyst Association (CAIA) each announced an initiative to support and help women succeed in fund management.

  • FundForum #WomenInFunds Rising Star Fellowship

FundForum is kindly offering ten free places to FundForum 2017 to women under 30 showing original thinking about the future of fund management in any aspect of the business.

  • CAIA #WomenInFunds scholarship

CAIA’s scholarship includes a waiver of the enrollment and registration fees for its Level I exams (worth USD $1,650) and will be offered to a woman professional in the asset management space. To apply contact Laura Merlini via email at lmerlini@caia.org.

Do you want to help with the next #WomenInFunds event?

womeninfunds 1

Claire Savage, AQMetrics COO on left with Geraldine Gibson, CEO, on Claire’s right

We want to ensure that #WomenInFunds meetings are held at future related events.

If you would like to be involved in the next network event which we aim to have at the US Funds Forum – Strategies for Asset Managers to respond successfully to disruption – from 25-27 October in Boston, please email info@aqmetrics.com

We welcome all input from our #WomenInFunds colleagues. Please email info@aqmetrics.com

More information

#WomenInFunds Berlin Photos

#womeninfundswomeninfunds 2 womeninfunds 3

#womeninfunds


Press

AQMetrics gears up for expansion

Claire Savage COO & Geraldine Gibson CEO. Pic. Bryan Meade 2/6/2016

Claire Savage COO & Geraldine Gibson CEO

 

The Sunday Business Post published an article on aqmetrics expansion plans on the 5 June 2016, noting:

Maynooth-based company plans to double its staff numbers to 30

AQMetrics, the risk management and compliance software company which raised $3.25 million recently, has hired four new executives as it gears up to expand internationally.

Founded by Geraldine Gibson in 2012, the Maynooth-based company plans to double its staff numbers to 30 within 12 months.

See Tom Lyon’s article on aqmetrics expansion plans in the Sunday Business Post on 5 June 2016 here.


Buzz

AQMetrics expands into North America

Delighted to announce the official opening of our first U.S. Office.

US Office


Blog, UCITS

New UCITS risk reporting requirements from the CSSF

On 22 April 2016, the CSSF released instructions on the new reporting template related to the risk and risk management of UCITS funds. The first report must be filed by 16 May 2016.

The reporting applies to those UCITS that either have more than €500 million total net assets (TNA), or that use the VaR method for calculating global exposure and have an average leverage greater than or equal to 250% of the UCITS’ total net assets.

The following is a list of the main information to be submitted:

  • leverage per risk factor (sum of notional amounts; optionally: commitment)
  • sum of notional amounts per derivative category
  • % liquidity per time bucket
  • % shareholdings of the UCITS per sector classification
  • debt portfolios only: % TNA per rating class (1, 2, 3, …10)
  • debt portfolios only: % TNA per credit spread bucket
  • % TNA per type of credit-linked instruments
  • minimum/maximum/arithmetic average use of EPM techniques
  • collateral from EPM derivatives
  • details of the largest counterparty exposures
  • collateral from OTC derivatives
  • new stress tests / sensitivities

This information has to be continually submitted to the CSSF, so efficiency and a systematic approach to the reporting is key.

For more information on the reporting requirements see https://www.cssf.lu/en/supervision/ivm/ucits/legal-reporting/

 


Buzz, Form PF

AQMetrics is ready for PFRD Release 2016.04

AQMetrics Form PF reporting application is now updated to comply with recent Form PF changes (PFRD Release 2016.04) which consist of more onerous granular reporting requirements and a new version of the Form PF xml schema. These Form PF changes (officially  “PFRD Release 2016.04”) include rearranged question numbers, an update to data types, a removed sub-asset class, and a new checkbox to indicate CFTC compliance.

Specifically:

    • Question 5 has a new tag “NFAFundCFTCComplianceFlag”
    • Data types were updated for Questions 20, 25, 28, 32, 40, 46 and 50
    • A sub-asset class was removed from Question 35
    • Questions 56 and 57 were removed
    • Questions 58 – 64 were renumbered to 56 – 62
    • Questions 63 and 64 were added

The changes are effective from the 16 April 2016.


Press

AQMetrics to expand into US

sundaytimes

The Sunday Times published an article on aqmetrics 2016 funding round on the 21 February 2016, noting:

AQMETRICS, a software company that helps investment managers meet Central Bank reporting guidelines, has raised $3.25m (€2.9m) from Frontline Ventures, Bluff Point Associates, and Enterprise Ireland.

The company, which was founded by Geraldine Gibson three years ago, is planning to hire 30 new staff and open an office in New York, where demand for its software has been growing rapidly.

“The product we have delivered into Europe is suitable for the US marketplace and is a solution that has been proven to work,” said Gibson. US funds using the software in Europe encouraged Gibson to bring the software across the Atlantic.

“The reason for taking the funding is so we can achieve scale in the US,” she said.

Gibson established her company after a career working in the financial and technology sectors.

See Vincent Ryan’s article on aqmetrics funding round in the Sunday Times on 21 February 2016 here.


Press

AQMetrics raises $3.25m from International Investors to Build Team & Expand to US

DUBLIN, February 16, 2016 /PRNewswire/ 

AQMetrics, an integrated risk management, regulatory compliance and surveillance software provider, today announced that it has closed its first external funding round. The $3.25million round consists of investors Frontline Ventures, Bluff Point Associates, and Enterprise Ireland.

(Photo: http://photos.prnewswire.com/prnh/20160216/333606)

AQMetrics was founded by Geraldine Gibson in 2012 when she noted that Investment Managers were finding themselves in an era of great change, making risk management and compliance exceptionally complicated. AQMetrics offers a simple, innovative and effective way to address regulatory risk and compliance. The firm delivers an ultra-fast, high quality cloud based platform that saves its clients time and money.

AQMetrics’ current team of 12 has been dedicated to building AQMetrics’ platform for the last three years. As a result, AQMetrics software as a service has been used by both EU and Non-EU Investment Firms to submit regulatory filings to regulators in Denmark, Sweden, Norway, the UK, Germany and Ireland. With a fast-growing client demand, the team is capitalising on the momentum: AQ Metrics will be hiring 30 roles in Ireland within the next 12 months and establishing a New York office in the next six months.

“At AQMetrics we saw that a very clear gap existed for a technologically advanced cloud based platform to simplify regulatory complexity in real time. We believe that AQMetrics will play a transformative role in the way Investment Managers meet their global regulatory obligations. The addition of Frontline Ventures and Bluff Point Associates as investors will help drive AQMetrics’ ambition to build on its existing success as a leader in the European RegTech space by establishing a US presence,” said Geraldine Gibson, CEO of AQMetrics.

Tom McInerney, CEO of Bluff Point Associates said, “We are very excited to partner with Geraldine and the team at AQMetrics to expand its growth opportunities here in the US. We see tremendous upside for Fintech firms in the ever increasing world of regulation, risk management and compliance reporting. This will be Bluff Point’s first investment in Ireland, where we have strong personal links and are delighted to have them join our growing portfolio of financial and healthcare technology companies.”

Frontline Ventures partner Shay Garvey said, “We are really excited to back such an ambitious founder – Geraldine had her eye set on international markets from the start. Her dedicated team is testament to the innovative RegTech product that AQMetrics has built.”

About AQMetrics
The AQMetrics platform integrates pricing, risk and regulatory solutions into a single offering. AQMetrics helps its clients stay compliant while eliminating errors, reducing downtime, avoiding risks and minimizing regulatory breaches. AQMetrics provides clients with end to end data management solutions, from data preparation through to reporting to comply with existing and future financial services regulations. AQMetrics delivers turnkey Pre and Post Trade Monitoring, UCITS Rules Monitoring, AIFMD Risk Management and Annex IV Reporting, AML/KYC and UBO monitoring, EMIR Reporting and OPERA Reports. Using AQMetrics firms can: track investor activity, orders, executions and holdings from pre to post trade; receive risk alerts and notification of compliance breaches; and gain access to a dedicated team of industry specialists who assist in the simplification of regulatory risk and compliance.

About Bluff Point Associates
Bluff Point Associates is a private equity firm based in Westport, Connecticut. Bluff Point actively invests in the healthcare information services sector as well as information services companies supporting the banking, trust, securities, retirement and wealth management sectors of the financial services industry. Bluff Point’s team collectively has decades of experience in recognizing a company’s growth potential and working with its management to reach that potential. For more information regarding Bluff Point, visithttp://www.bluffpt.com.

About Frontline Ventures
Frontline Ventures is an early-stage venture capital fund based in London and Dublin, with a focus on European enterprise SaaS startups. Frontline is focused on the needs of the new wave of technology entrepreneurs – investing in the best teams that build capital-efficient businesses in high-growth markets. For more information, visit http://www.frontline.vc

–        Ends –

Photo:
http://photos.prnewswire.com/prnh/20160216/333606

Photo: http://photos.prnewswire.com/prnh/20160216/333606
http://photoarchive.ap.org/
Photo: http://photos.prnewswire.com/prnh/20160216/333606
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AQ Metrics

CONTACT: For media inquiries, an interview, or extra images, please contact Suzanne McGann. E-mail: suzanne.mcgann@aqmetrics.com, Tel: +353-(1)-6292607


Press

AQMetrics connects to DTCC trade repository

DUBLIN, February 11, 2016

AQMetrics, a leading provider of integrated risk and compliance software for the investment management industry, announced today a new connection to The Depository Trust & Clearing Corporation’s (DTCC) Global Trade Repository (DTCC GTR), the leading provider of trade reporting services in Europe.

“AQMetrics (AQM) provides clients with end to end data management solutions, from data preparation through to reporting to comply with existing and future regulation. AQM’s working relationship with DTCC’s GTR will help bring efficiencies to mutual clients with reporting obligations under European Market Infrastructure Regulation (EMIR) and in the future, Markets in Financial Instruments Regulation (MiFIR)” said Geraldine Gibson, CEO, from AQMetrics.

AQMetrics delivers turnkey Pre and Post Trade Monitoring for Reg NMS, OATS and OTS reporting, UCITS Rules Monitoring, AIFMD Risk Management and Annex IV Reporting, AML/KYC and UBO monitoring, EMIR Reporting and OPERA Reports. Using AQMetrics firms can: track investor activity, orders, executions and holdings from pre to post trade; receive risk alerts and notification of compliance breaches; and gain access to a dedicated team of industry specialists who assist in the simplification of regulatory risk and compliance for Investment Managers.

DTCC’s GTR is dedicated to bringing greater transparency, risk mitigation and cost efficiency to the global OTC derivatives market. Clients with EMIR reporting requirements can achieve efficient and cost-effective compliance with these evolving regulations leveraging the GTR service.

“We are delighted to be working with DTCC GTR,” said Geraldine Gibson, CEO at AQMetrics. “Recently we have seen increased client demand for automated end to end EMIR reporting; and as a result we recognise the need to provide our clients with even more choice from our ‘One Stop’ shop.

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Blog, Market Data

The latest methodology for the valuation of derivative liabilities

Today the European Banking Authority (EBA) published the final draft Regulatory Technical Standards (RTS) on the methodology for the valuation of derivative liabilities for the purpose of bail-in in resolution. These draft RTS have been developed according to paragraph 5 of Article 49 of Directive 2014/59/EU (BRRD). These standards provide EU resolution authorities with a methodology for the valuation of derivative liabilities of credit institutions placed under resolution and ensure that the discipline brought in by the new bail-in tool can effectively be extended to these liabilities too.

Derivative counterparties will be given the opportunity to provide evidence of commercially reasonable replacement trades within a certain deadline; if they do not exercise this option, then resolution authorities will apply a statutory methodology supported by observable market data or other relevant information.

Resolution authorities may establish the value of derivative liabilities as on the close-out date or as on the date when a price is available in the market. For centrally cleared derivatives, the final draft RTS provides for a process that relies in principle on the Central Counterparty (CCP) default and takes into account the applicable regulatory framework under the EU Market Infrastructure Regulation (EMIR)

You can find the RTS on valuation of derivatives here


AML, Blog

Report on Anti-Money Laundering/Countering the Financing of Terrorism and Financial Sanctions Compliance in the Irish Funds Sector

On 18th November 2015, the Central Bank of Ireland (“CBI”) issued a report entitled: Report on Anti-Money Laundering/Countering the Financing of Terrorism and Financial Sanctions Compliance in the Irish Funds Sector(the “Report”). The report is based on site inspections carried out by the CBI over the course of 2014.

All Funds and Fund Service Providers should carefully consider the issues raised in the report, and to use the report to inform the development of their AML/CFT and FS frameworks.

What are the main issues raised in the report?

The Report identifies that more work is required by firms in Ireland to effectively manage money laundering/terrorist financing risks.

The Report found insufficient evidence of adequate and timely risk assessments . The CBI expects that risk assessments be conducted and reviewed at least annually, and that these assessments include all risk categories. The risk assessment should document controls in place to mitigate risks with action plans to address any gaps. Policies and procedures should be kept up to date and reflect any changes in the risk assessment.

The Report highlights that, while Funds may delegate many of their AML/CFT functions, they remain responsible for
ensuring compliance and oversight of these outsourced activities. The CBI expects that such oversight includes a review of the Administrator’s policies and procedures along with assurance testing of AML/CFT processes, for example, through sample testing of investor files.

The Report identifies a number of issues in relation to investors including:

  • Inappropriate application of SCDD, and application of SCDD without supporting evidence justifying the approach;
  • Deficiencies around beneficial owner information and verification;
  • Failures in the management of PEPs;
  • Failures of Fund Boards to retain adequate control over sign off of relationships;
  • Failure to document source of funds and source of wealth;

With regards to Customer Due Diligence (“CDD”), the CBI found that arrangements with third parties to conduct elements of CDD were lacking required conditions. The CBI expects that policies and procedures set out circumstances under which a Fund would cease to provide services or discontinue a relationship due to an investor’s failure to provide CDD documentation. The Report is clear that the blocking of additional subscriptions to a Fund does not constitute the discontinuation of a business relationship.

The Report noted that not all Board members engaged in on-going AML/CFT training and outlines the CBI’s expectation that all persons involved in the conduct of the business (including staff at outsourced service providers) are provided with AML training, and that adequate training records for all staff are retained.

How can AQMetrics Help?

AQMetrics software is used by Fund Managers to spot check their outsourced AML/CFT and FS functions. AQMetrics training is delivered over the web to ensure that all Board members receive on-going AML/CFT training.

If you would like to discuss AQMetrics AML/CFT and FS services or have any queries related to AQMetrics in general, please contact Lorna Devlin +353 1 6292607


AIFMD, Blog

Important Update: AIFMD Annex IV reporting for Q4 2015

The Irish regulator, the Central Bank of Ireland (CBI), has changed its policy and will require US and other non-EU alternative investment fund managers (non-EU AIFMs) to make “Annex IV” reports in respect of master funds if one or more of that master fund’s feeder funds are marketed in Ireland.  Such reporting will become mandatory from the reporting period beginning on 01 January 2016. For quarterly reporting AIFMs, the report will be due to be submitted by 30 April 2016. Non-EU AIFMS are, however, encouraged by the CBI to include available information in respect of non-EU master AIFs in their reports for the reporting period ending on 31 December 2015 (which, must be submitted by 31 January 2016).

Who does this change affect?

US and other non-European AIFMs of alternative investment funds (AIFs) who market a non-European feeder AIF into Ireland under the national private placement regime (NPPR) established under Article 42 of AIFMD but do not market the corresponding master are impacted.

What is the change?

Annex IV reports to the CBI have needed to be in respect of the feeder AIF only. With effect from the end of this month, the CBI will require Annex IV reports to be made in respect of the master fund.

What should managers do now?

Non-EU AIFMs impacted by these changes will have to put in place systems and procedures to complete the Annex IV reports in respect of master AIF-level data and report the same by the end of January 2016. Because the obligation to make an Annex IV report is triggered by marketing, non-EU AIFMs which have not attracted investment should consider whether or not they wish to retain the ability to market the relevant feeder AIFs in Ireland under that country’s NPPR or whether they should retract their registration(s).

How can AQMetrics Help?

The good news is that AQMetrics has a turnkey solution for Annex IV reporting, which is used by many EU alternative investment fund managers to comply with AIFMD regulations. AQMetrics makes it simple for the US and non-EU managers to comply with the regulations in accordance with the Q1 2016 deadline

 


AIFMD, Blog

The latest version of the AIF Rulebook is published on 04 December 2015

On 4 November 2015, the Central Bank of Ireland published the latest version of the AIF Rulebook. The AIF Rulebook is the Central Bank  of Ireland’s rulebook in relation to AIFs which contains chapters concerning Retail Investor AIF, Qualifying Investor AIF, AIF Management Companies, Fund Administrators, Alternative Investment Fund Managers and AIF Depositaries.

The latest Rulebook can be found here.


Press

aqmetrics CEO on being part of the FinTech Revolution

Read AQMetrics CEO, Geraldine Gibson, on being part of the Fintech revolution Here