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Operations Newsflashes: U.K. Watchdog Group Tightens Soft Commission Rules, and more

U.K. Watchdog Group Tightens Soft Commission Rules, Tangosol Releases SOA Data Grid, Maples Finance Expands Linedata Collaboration, CQS Adopts Trade Processing Capabilities

U.K. Watchdog Group Tightens Soft Commission Rules

The U.K.'s Financial Services Authority is proposing to redraft its rules on soft commission payments between brokers and fund managers to expressly prohibit the bundling of electronic information and automated execution services in return for research and other services.

The watchdog is informally consulting with market participants on a proposed tightening up of the guidelines, which were first issued at the beginning of the year. At the time, the FSA allowed fund managers to make their own interpretations of the precise nature of goods and services covered by the code. The proposed changes follow queries from brokers concerning connectivity services and associated electronic systems and whether these services could be paid for out of client commission.

The proposed amendments to the guidance would specifically prohibit the inclusion of "connnectivity services such as electronic networks ... and computer software including order and execution management systems".

"This does not mean that firms cannot purchase the goods and services that they value, said the FSA in a release. "Rather our position is that the commission charge is not the appropriate charging or payment mechanism for funding the purchase of these goods or services. Firms of course, recoup the costs of these services from clients under specific agreements or indirectly through their management charge."

Tangosol Releases SOA Data Grid

As enterprises deploy data virtualization technology as a key enabler for service-oriented architecture (SOA), they are dramatically increasing the amount of data and business logic managed by their data grid infrastructures. In order to meet this growing demand and continue to lead the market in providing ubiquitous access to the data grid as a shared infrastructure, Tangosol has introduced the Coherence Data Grid Solution Set, broadening data grid access to large-scale compute grids, application servers and desktop applications. In addition to expanding the accessibility of enterprise information, these new clients are designed to optimize data grid performance for a full range of applications, including clustered caching, parallel transactions, analytics and event processing. New functionality of the Tangosol data grid includes:

  • Coherence Data Client: Enterprise-wide access to services provided by the data grid.

  • Coherence Real Time Client: Real-time access to data feeds, including near-caching of data on the client as well as continuous query caching.

  • Coherence Compute Client: Optimized for data-intensive compute grid nodes as well as transaction intensive application servers.

    "The introduction of the Coherence Data Grid Solution Set will accelerate the industry move toward virtualization by lowering the barriers to accessing data throughout the enterprise," said Cameron Purdy, CEO of Tangosol, in a release.

    Maples Finance Expands Linedata Collaboration

    Maples Finance, an offshore financial services firm that provides fund accounting and administration services to a wide range of investment funds, has expanded its relationship with Linedata Services. An MFACT user since 2005, Maples Finance has contracted both the MSHARE and MPARTNER systems, as well as expanded its existing MFACT contract, and is now live on the new systems.

    MFACT is a fund accounting and administration system used by hundreds of mutual funds, hedge funds and trusts worldwide. MSHARE is a scaleable transfer agency and shareholder record keeping system that supports both retail and institutional investment funds, and MPARTNER provides specific functionality for partnership accounting and tax reporting.

    "With MFACT, MSHARE and MPARTNER, we are able to support all fund structures and the complex securities typically traded by our hedge fund clients," said Scott Somerville, global head of investment funds for Maples Finance, in a release.

    CQS Adopts Trade Processing Capabilities

    CQS, a global asset management group with investment operations in London and Hong Kong with $5 billion assets under management, recently adopted Markit's Trade Processing capabilities. Markit Trade Processing is an end-to-end service that offers buy-side and sell-side clients the ability to affirm their OTC derivative trades, and to confirm them by using links to industry utilities such as the Depository Trust & Clearing Corporation (DTCC). The service spans all asset classes and instruments, and automates and streamlines both STP (straight-through processing) and non-STP trades.

    Novations, terminations and dispute resolution are also supported, and comprehensive reports are provided to give users a complete view of their processing risk. Portfolio reconciliation has recently been added to the service to streamline clients' otherwise onerous daily and monthly reconciliation process. "Given the onward march of the OTC derivative markets, and the increasing numbers of participants entering these markets, it is now crucial to embrace straight-through-processing," said Jason Parker, head of middle office at CQS, in a news release. "CQS feels the main strength of Markit's service is its ability to facilitate OTC processing workflow across counterparties and asset classes, and to provide a comprehensive overview and audit trail."

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