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M&G Targets EDM for Solvency II

M&G Investments, a European investment manager with 200 billion sterling of assets under management, completed an upgrade to GoldenSource EDM version 8 last May.

Despite being five months old, this counts as "breaking" news in the world of financial IT.

M&G performed the upgrade "to utilize the derivatives capabilities, doubling instrument volumes and delivering trusted, consistent information to power key M&G front office systems. These systems include Algorithmics for risk, Fidessa LatentZero for trading and compliance, and thinkFolio for portfolio management," according to a press release.

"GoldenSource EDM is a core piece of our infrastructure, providing us with quality data in addition to audit and governance process support backed by enterprise-class power," says Alan Towndrow, Group IS Director, M&G Investments in a press starement. "New regulatory directives, such as Solvency II, require firms such as ours to produce increasingly granular information to support risk management and capital adequacy practices. Having access to quality data enables us to pre-empt regulatory demands and ensure our systems are ready for any additional changes."

Solvency II is essentially Basel II for the insurance business. Neill Vanlint, managing director of client operations for GoldenSource tells Advanced Trading that "The asset managers of insurance companies must show that they have assets to match their liabilities. Reports must show all the way through to their data that they use for calculations. Are the calculations based on latest and greatest data and does it fall in line with risk measurement?"

With new regulatory initiatives, such as Dodd-Frank, MiFID II and the forthcoming Basel III, investment firms will be pushed to get their myriad data feeds in order.

"It's been known for a long time for valid business reasons and now regulators are forcing this issue. It is driving business wit other drivers mixed in, such as improving the quality of data so you have less breaks, less discrepencies among the data feeds and the trading systems. You can now compare data against the different service level agreements," Vanlint tells AT.

In the original press release, Hugh Griffiths, senior consultant, Cutter Associates, says, "Solvency II has been a hidden problem for asset managers. Their insurance clients are, and will do so increasingly, demanding more data -- provided to a greater, more granular level of detail and to be provided more frequently and quicker than today. At the very least, a stronger set of data governance and provision processes is required."

He continues, "And, in many cases, we are aware that improved data management systems are being implemented to address this need. The recent delays to the full implementation of Solvency II will provide extra time for asset managers to meet their client needs in this area."

M&G first purchased GoldenSource EDM in 2003 as a central security master to normalize, enrich, and cleanse instrument reference data.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio

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