Standard & Poor’s, a provider of reference data products, Advanced Portfolio Technologies (APT), a risk analytics provider, and European compliance software provider Aquin Components have announced a partnership to provide a new risk management service called RiskComply.
Research by Standard & Poor's last year involved interviewing compliance and risk officers at 319 investment management firms across Europe between June and September 2006. In total the institutions that took part in the research are responsible for ?10 trillion of global AUM. 70 of the investment firms are in the Watson Wyatt World 500 list.
The research revealed a growing need among medium and small sized asset managers in Europe for compliance and risk monitoring solutions that allow fund managers to monitor both mandate and regulatory risk. As an ASP (Application Service Provider), RiskComply allows customers to lease a combination of reference data and rules-based analysis that would otherwise be cost-effective only for large asset managers.
RiskComply has been created for the entire investment management community. It is particularly helpful for firms that do not possess the infrastructure or resource to create their own risk and compliance framework, the firms say. RiskComply can help firms keep aware of potential hidden risks within portfolios and can help identify how close these portfolios are to breaching concentration limits.
"European directives, for example UCITS III, and the increased use of derivatives by front office professionals, are making it increasingly difficult for compliance and risk officers to monitor positions within the funds under their auspices," says Jim Taylor, managing director for S&P's global cross reference services division. "RiskComply has been designed exclusively to help such professionals with this important daily task."
"RiskComply takes the same approach to risk measurement as that used by portfolio managers – there will no longer be a disconnect between risk/compliance reports and the portfolio construction process itself, as there has so often been before. RiskComply will set a new level of expectation in the risk and compliance community for consistency, completeness and reliability," says Jamie Ridyard, managing director of APT.
Goetz Bernhardi, CEO of Aquin Components, notes, "Aquin expect high market interest for RiskComply because this service offers prospective clients of all sizes the possibility of utilising best- of-breed compliance monitoring across the world's major investment jurisdictions powered by MIG21."