Challenges of AIFMD Reporting Implementation

By Alexey Utkin

Alexey Utkin, financial services practice leader at DataArt UK, contributes a bylined article to TABB Forum on the benefits of recently released AIFMD reporting solution by DataArt.

“AIFMD brings alternative fund managers from hardly any regulations to a very comprehensive framework in a very short period of time. And the directive’s reporting requirements present a significant data management challenge.

The Alternative Investment Fund Managers Directive, or AIFMD, became law in July 2013. Now deadlines for AIFMD Annex IV guidelines, which prescribe transparency reporting requirements, are fast approaching, and fund managers are facing major challenges as they begin implementing solutions to comply with them.

… AIFMD brings alternative fund managers quite close to Undertakings for Collective Investments in Transferable Securities (UCITS), from hardly any regulations to a very comprehensive framework in a very short period of time. While earlier this year, many firms did not view the reporting portion of AIFMD as a top implementation priority, it has now climbed to the top of their lists.

Generally, implementation of AIFMD requirements has two streams of work. The first is defining a workflow and process within an organization… The second is assessing how and to what extent problems should be solved from a technology perspective.

Unfortunately, the majority of fund managers… have a unique data management situation, which combines a custom and third-party system that holds only subsets of data – positions data, trading data, market risk data, liquidity and counterparty risk, strategies, and investors’ data. The problem tends to be bigger for bigger funds.”

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