Executive Summary
To manage their capital requirements most effectively under Solvency II, insurers will need their asset managers to reveal the holdings data for any assets that insurance firms are investing in. In the wrong hands that information could be used to identify the investment management strategy, neutralising the buy-side firm’s competitive edge. This data must therefore be kept secure at all times and ideally transferred only to non-competitive partners in a controlled manner.
Existing methods of tracking asset ownership cannot deal with complex investment structures, nor connect the various parties together. Making this happen is potentially costly and insurers are already paying through the nose to avoid non-compliance. For asset managers Solvency II is looking expensive; they will either be hit by the loss of business or the loss of intellectual property; a solution that saves on both is needed.
For insurers or asset managers to build their own systems would be extremely difficult; the costs for each firm to interface with each platform would be prohibitive let alone the development costs. Systems are being developed by third party administrators (TPAs), ratings agencies and data vendors but they will need to establish connectivity between the various investors and asset owners to be effective.
MoneyMate’s Fund Price and Information Exchange (PIE) Utility is a centralised repository which normalises and stores holdings data supplied by asset managers before it is offered, via permissioned distribution, to the relevant insurers. With charges only applied to asset managers, its model has significant appeal to the end investor and to their service providers. Buy-side firms using the Fund PIE Utility can increase their appeal to insurance clients by gaining visibility of their end investors through the utility and developing tailored products, while retaining mandates by supporting compliance with Solvency II. It provides a good incentive for connectivity on both sides; it tackles the root issue of creating standardised, accessible data, supplies a model of connectivity and limits complexity by using a single utility to connect multiple parties.
While there is some uncertainty about the exact date of enforcement, many insurers are already looking for asset managers that will support them.
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About MoneyMate
MoneyMate is a specialist provider of managed data services to the global asset managers and their service providers. We put our clients in control of their product information to enhance their distribution capabilities and enable them to deliver best-in-class client communication to the market. We assist our partner clients to implement data governance across their organisations in order to delivery transparency both to regulators and to increasingly discerning investors.
MoneyMate is headquartered in Dublin, Ireland, with offices in London, New York, Boston, Milan and Stockholm
For more information, please contact: John Dowdall ([email protected])]]>
