Imperium Compliance

Simplifying, automating and streamlining the way that Investment Guidelines are managed.

THE CHALLENGE

Asset Managers are required to adhere to investment restrictions. Such restrictions can originate from regulations such as UCITS, fund prospectus and related documents, or from investment management agreements. If these restrictions are not adhered to, the implications can be financial if the client or fund is impacted by a market move resulting in loss but may also be reputational since a violation is frowned upon investors and regulators. All Asset Managers will have a team of specialists who monitor adherence to such restrictions. These teams vary in size from 2 up to 80 for large houses. The team has the responsibility of extracting restrictions from documents such as Investment Management Agreements, prospectuses and regulations, interpret these and then code them in to an Order Management System, where they attempt to prevent violations at pre and post trade stages. This process is entirely manual and as a result subject to the risk of human error. It is also usually unclear to fund managers and related staff as to the true meaning of each restriction and where each restriction originates from. The process can take up to 5 days to complete one document. Imperium intends to shorten this initially to a few hours and eventually several minutes.

THE SOLUTION

Imperium identifies investment guidelines within a document such as an investment management agreement or prospectus using Natural Language Processing, creates a summary of the guideline, then matches the guideline with a corresponding rule which has been coded in to an Order Management System. Over time the system will learn the code behind the system rules and will then be able to generate them automatically. The system will provide a fund manager or institutional investor with a complete view of their guideline universe, where each rule is applied, how it is monitored and from which document it originates.

 

THE IMPORTANCE

Investment houses are spending millions of pounds each year managing their guidelines. Currently much of the process is manual and involves human intervention. Also there is no dynamic link between an investment guideline in a document and it’s associated rule coded into an Order Management system leading to confusion as to where rules originate from. The manual nature of this process often leads to misinterpreted and missed guidelines which can result in both financial and reputation damage.

NEXT STEPS

Companies can contact spencer.landau@imperiumcompliance.com directly by email or phone +44 (0)7810 808 881 to request a discussion or demonstration if they are interested.

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