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Maximising compliance and reporting potential with cutting edge OMS

A quality OMS can help managers execute their trades more efficiently, which is critical given how markets continue to become more complex.
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The benefits of leveraging order management systems (OMS) are well known in the investment industry. A quality OMS can help managers execute their trades more efficiently, which is critical given how markets continue to become more complex. In an environment where buy-side operating costs are rising – largely because of tough macro conditions (i.e. inflation); declining fees and the growing chorus of operational requirements, the automation an OMS brings to trading is vital. OMS’s help compliance officers with tracking the life cycle of trades to determine if there's any illicit activity or financial fraud, as well as any regulatory breaches by an employee of the firm. An OMS can improve workflow and communication among portfolio managers, traders, and compliance officers.

Enabling trade compliance

A fully integrated platform that facilitates straight through processing for front middle and back office can not only reduce errors, improve operational efficiency and lower risk, but provides compliance teams with a holistic overview of the trade lifecycle. This supports both pre and post-trade compliance and ad hoc compliance checks through a powerful, user-configurable, rules based compliance engine. The 360 degree view the OMS facilitates for each trade supports either outsourced or internal compliance teams to spot potential fraud, regulatory inaccuracies or erroneous transactions which might either be outside of an investment manager’s mandate to have highlighted or simply not obvious during the physical trade.

Investors are more focussed than ever before on due diligence, particularly in a virtual workspace, and an OMS reassures the investor than the investment manager has quality internal controls, assisting to attract more sizeable mandates.

OMS as a tool for supporting reporting

An OMS offers managers real time insights into their underlying portfolio holdings. While useful from an internal risk and compliance reporting perspective, this information can also help managers view and report on information in a timelier manner to both their investors and regulator.

In the case of the former, investors can ask for highly granular information about their portfolio exposures, delivered to them in a format which is easily accessible and digitalised. Such transparency is crucial if managers are to attract inflows and fundraising in today’s competitive market.  

Regulators are also aware that digitisation provides them with the ability to restructure the way they request, review and manage information from funds and investment managers. A successful OMS set up removes the manual workload from the manager in order to provide that information, protecting themselves and their investors from accidental errors.  

In the EU, the AIFMD obliges asset managers to complete Annex IV reports and in the US the SEC recently proposed significant amendments to the Form PF – namely by lowering the reporting threshold for private funds, but also insisting that managers report serious events within one business day. An effective OMS can assist the manager with these more onerous reporting obligations, and should they be using an outsourced compliance support team they are also able to transfer information in a timely and secure manner. Regulatory reporting will continue to intensify; so too will the need for a best-in-class OMS solution for managers.

Portfolio BI’s OMS tool is designed to handle the operational workflows of multiple asset types and fund structures including hedge funds and separately managed accounts in addition to a wide variety of asset types.

Along with compliance reporting and trade support, Portfolio BI’s OMS can handle complex trade allocations; minimises manual bookings through FIX integration; supports timely trade processing and allows users to scale their businesses.

If you would like to understand how Portfolio BI’s OMS can support your trade and compliance requirements, please get in touch.

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