The context of the CSDR regulation

The CSDR regulation was designed by ESMA in response to the growing public demand for transparency in transactional flows since the 2008 crisis.

Who is affected?

The following entities are concerned:

• CSDs (central securities depositories) and by extension their clients (investment management companies, institutional investors, insurers, mutual insurers, etc.)
• CCCs (central clearing counterparties)
• Trading platforms
• Trade repositories
• Payment systems

Which financial instruments are concerned?

The following instruments that are potentially traded and/or cleared in the EU/EEA area:

• Securities (WAPS)
• Emission allowances
• Money market products
• UCITS

What are the drivers of CSDR?

• An optimised settlement/delivery cycle
• Infrastructure
• Investor protection
• Transparency

The reference text published by ESMA (No. 909/2014) came into force in February 2022. Given the impossibility of enforcing the entire regulation, ESMA published a number of relaxations in March 2022, including non-regulated derivatives, review of the mandatory buy-in principle, and review of penalty application and rates.

The rule and its impacts

Description of the investor protection rules designed by ESMA:

• Prevention of settlement defaults
  • Obligation to wind back settlement instructions on settlement date
  • Settlement date = Trade date +2 maximum
• Gradual measures
  • Confirmation terms set in advance
  • Possibility of partial settlement
  • Financial penalties & suspensions
• DTC obligations
  • Implementation of monitoring tools
  • Quarterly ESMA reporting

Circumvention of the rule

Central depositories (Euroclear, Clearstream, etc.) have delegated the monitoring of settlement obligations to local global custodians (BP2S, Caceis, SGSS, etc.). In reality, custodians have devised a strategy to address the issue from their point of view and to suit their needs, setting up automated "partialisation" as a default rule.  They thereby protect themselves from the risks of penalties provided for by the new regulation instead of their clients whom the regulation was meant to protect.

Why circumvent the rule?

If custodians fail to use all the means at their disposal to unwind their clients' settlement instructions, they are obliged to pay penalties to their clients to cover their losses due to late delivery and the cost of redemption as participants in the market regulated by their clearing house (LCH clearnet, etc.). By a domino effect, a rule that is supposed to protect clients (final investors) forces the latter to be subject to the regulation instead of the upstream players in the settlement/delivery chain.

How to circumvent the rule?

Custodians put forward their interpretation of the regulatory text, with automated "play-by-play partialisation" by default for any settlement/delivery defaults on their clients' securities or cash positions.

How does JUMP support its users in respect to CSDR regulation? 

JUMP carried out regulatory intelligence, well before ESMA's announcement on CSDR in 2014. Until January 2022, major custodians were communicating a default behaviour of "non-partialised" at the start of CSDR and identified impacts identified were on SSI and Swift communications. In February 2022 JUMP detected the first functional impacts in production.

Having identified these early impacts, JUMP worked to provide users with a solution that would allow them to stop and identify flows, giving them the necessary tools to comply with the regulation. 

The JUMP solution allows for complete automation of the partialisation process (from order placement to reconciliation). 

JUMP Technology has been shortlisted for the HFM European Services Awards by With Intelligence in the following categories:

• Best fund accounting and reporting software
• Best portfolio management software provider

We are thoroughly thrilled to be recognized as one of the best European software providers in the Investment Management industry. HFM European Services Awards' winners will be announced on 21 April at the iconic Victoria and Albert Museum in London. Congratulations to JUMP teams for their continuous quest for innovation, that made this nomination possible.

The whole JUMP team would like to thank all those who participated in the latest JUMP Club U' on December 17, 2021, which took place virtually and brought together several dozen JUMP users. In the JUMP Club U' summary report below, discover the fundamentals and features of our JUMP Private Equity solution.

Fundamentals of the JUMP Private Equity solution

Thanks to its flexibility, our platform makes it possible to integrate operational guidelines for Private Equity business across the entire Data + Front-to-Back + Reporting chain, thus providing our clients a concrete solution to the many business challenges in this industry.

Our solution covers Private Equity buy-side business through investment in Private Equity funds, direct unlisted investments, or real estate assets.

What are your Private Equity needs?  

• Benefit from a single source of truth to monitor and manage your Private Equity activities
• Cover the entire chain of Private Equity-related transactions and handle different types of orders 
• Monitor and measure the performance of your Private Equity investments in real-time

What are the advantages of the JUMP Private Equity solution? 

• Accelerated onboarding of your Private Equity business in JUMP with our standard Private Equity package
• Consolidation of all your Private Equity data in a common data repository, allowing users (Front, Middle, Back, Reporting) to share a single, high-quality data source in real-time. Example: monitor the status of a dealflow, its history, and the documents associated with each stage of the dealflow 
• Complete, standard coverage of the entire Private Equity value chain, with the management of Private Equity transactions, from the early stages of the investment period to the end of the amortization period (management of initial commitment, calls and returns, amortization or distribution, etc.), as well as fixed and variable share models 
• Libraries of standard and customizable Private Equity metrics, both for management purposes and performance measurement (initial and residual commitments, PIC, PI, RVPI, TVPI, IRR, etc.)
• Standard or customizable valuation models by asset class. With JUMP Private Equity, you can estimate the value of portfolio positions (aggregate and unit valuation) based on the last official published prices/NAV
• Libraries of standard and customizable reports and dashboards for monitoring and steering Private Equity business 

Want to know more about the JUMP Private Equity module? Request a demo with one of our experts. 

We would like to thank all those who participated in our latest webinar “Asset & Wealth Managers: How technology providers can support your ESG investment strategies”. JUMP experts Alexandre Candaele and Samin Mansour were happy to share their insights on the subject of Green Investing and speak with participants about their ESG challenges.

If you didn’t have the opportunity to participate in our live webinar, you can watch the full recording here: watch the replay.

The whole JUMP Team was pleased to welcome the 3rd edition of the JUMP Certification Program, which took place from 25th to 29th of October.

Thanks to the intensive 3-day training supervised by JUMP's best experts, another class of JUMP Academy has obtained their JUMP Fundamentals level with honors.

Congratulations to our certified partners :

• Nathanaël Dahan from Inadeo
• James Kingue from Inadeo
• Félan Bouvand from Inadeo
• Moukangala Ngaka from Inadeo
• Mehdi Fourar de from Consulting

Interested in joining the JUMP Academy Certificate Program or learning more about the different certification levels? Contact our experts to discover more.

Since mid-2020, the AMF has been adhering to ESMA guidelines on liquidity stress test scenarios for UCITS funds and AIFs.  In 2021, after analyses and discussions with 200 portfolio management firms, Liquidity Stress Tests were prioritized for supervision by the AMF.

There are now several points to keep in mind when it comes to liquidity management:

• Pre-investment assessments (formalize liquidity assumptions pre-investment)
• Stress tests on fund assets and consistency of the assumptions used in models
• Recognition of liabilities and repurchase simulations
• Margin calls and derivatives

What are the challenges when it comes to asset monitoring?

• Managing the risk associated with massive buyouts and cost overruns
  • Determine a fund’s capacity to generate cash within a limited timeframe
  • Ensure that the disposal of assets does not result in additional costs or change the initial position of the fund
• Identifying the impact of a scenario on prices and volumes
  • Adjust volume and price assumptions
  • Apply a transaction surcharge in a stress test scenario
  • Apply different bid/ask spreads to an industry or market cap category
• Using different selling strategies in stress test scenarios
  • Strategies without adjusting the portfolio risk profile
  • Strategies that limit additional costs for illiquid holdings but modify the fund’s liquidity profile
• Identifying liability quality
  • Breakdown by client type
  • Breakdown of the largest investors
  • Redemption risk indicators by category
• Harnessing historical data from inflows
  • View history of the largest repurchases, both by volume and as a % of AUM
  • Over 1 days, 5 days, for 1 investor, etc.
  • Model subscription/redemption dynamics

The features JUMP can provide to overcome these challenges:

• Ability to edit a set of standard scenarios you can run on demand
  • Library of stress test scenarios to apply to the portfolio on a given date
  • Examples: Small cap stress test, money market fund stress test, etc.
• Extensive monitoring to enhance liquidity models
  • Cash management for derivatives
  • Margin calls and increased collateral deposits
  • Liquidity scoring for securities without volume data
• Production of liquidity risk monitoring and indicator reports
  • Customizable graphs and charts using dashboards
  • Reports for the risk committee

Liquidity Risk use cases in JUMP:

• Portfolio Manager
  • View the liquidity of one holding and/or the least liquid positions
  • Anticipate cash flow under stress conditions according to different assumptions
  • Control rebalancing in case of shock according to a strategy adjusted to the risk profile of the fund
• Risk Manager
  • Matrix of maximum losses per scenario, per market, etc.
  • Detailed breakdown of asset liquidity
  • Alerts when liquidity thresholds are crossed by asset class or for a shareholder’s investment ratio
• Compliance Manager
  • Simulate regulatory and statutory controls on a stressed portfolio
  • Recognize liability allocation/holdings of the largest investors
  • Assistance reporting to regulatory authorities

The whole JUMP team would like to thank all those to who participated in JUMP Club U’ on October 15th, 2021, which took place virtually and brought together several dozen JUMP users.

Discover the fundamentals, features, and use cases of the JUMP Web Portal, an innovative solution to digitize your area of reporting and improve communication with your counterparties.

JUMP Web Portal: enhance the customer experience with digital reporting

Thanks to the JUMP Web Portal, you can easily create custom digital portals to provide your clients secure, Anytime & Anywhere access across devices (smartphones, tablets, and PCs) with adaptive design.  Your clients will no longer have to wait until the end of monthly or quarterly reporting cycles to consult their portfolio data: they’ll be able to create custom reports and interactively query portfolio data (composition, allocation, performance, risk, important documents, etc.)

With JUMP Web Portal, you can delegate a host of management operations to the customer to enhance their experience and satisfaction, all while guaranteeing data quality and traceability with the centralized JUMP data repository, and reducing costs by minimizing the need for operational teams.

Why should you implement a dedicated web portal?

• Anytime & Anywhere access: offer clients, partners, and third parties real-time access to their dedicated web space across all their devices
• Easily build dedicated web spaces: provide your clients secure, custom, and scalable web spaces that centralize essential financial information, displayed using your company’s colors
• Improve the customer experience: guarantee a custom, user-friendly experience with the JUMP web portal to optimize the customer experience for your investors and clients
• Streamline access to client information: offer real-time access to financial information and increase production frequency and reporting precision

Easily build custom enhanced web spaces

The JUMP Web Portal makes it easy to build custom web spaces with widget libraries preconfigured for investment management, as well as to pool custom reports and widgets common to management.  The solution interfaces with major digital safe and electronic signature solutions (Docusign, Luxtrust, Universign, etc.). 

The major innovations the JUMP Web Portal provides are:

• Customization: generate fully personalized KYC forms that can be pre-filled with existing client information
• Full automation: robotize your processes with automatic CRM/PMS updates and form generation
• Controls: create custom alerts and notifications to monitor investment processes as closely as possible

Use cases of the JUMP Web Portal:

• Public portal for fund management: give your clients or investors real-time access to fund data: NAV, allocation, performance and risk indicators, refined search with a variety of filters
• Intranet: provide custom access to employees who are not direct users of JUMP (sales, top management, etc.) with personalized dashboards consolidating fund and managed account performance data, for example
• Wealth management, end customer side: give your end customers access to customized portfolio overview dashboards (e.g. composition, allocation, list of transactions, performance, etc.), all while giving them the opportunity to input their management intentions
• Web space for business providers: give your business providers access to projections for the different retrocessions they will collect
• Wealth management, manager side:
  • A mandated management company can easily access the assets an institutional investor or an insurer has delegated to it from a dedicated web portal
  • An insurer can provide a management company or an institution access to its web portal to view the assets entrusted to it

We are thrilled to announce that JUMP has been nominated in several categories for the A-Team Data Management Insight Awards, which recognize the leading providers of investment management solutions, services, and consultancy for capital market participants.

This year, JUMP Technology was shortlisted in 4 categories:

• Best Buy-Side Data Management Platform
• Best Fund Accounting, Portfolio Management & Data Platform
• Best Data Management Initiative for ESG
• Best Performance Measurement Solution

These nominations attest to the robustness of JUMP’s core Front-to-Back software suite and Data Management solution.

JUMP Data Management is a Best-in-Class Data Management solution that is 100% dedicated to players in the Investment Management industry, allowing them to centralize, control, and improve the quality of their data, thus creating a single, reliable source for all data requests. With JUMP Data Management, you are guaranteed to benefit from precise, quality data throughout your entire investment management chain.

Fully integrated with JUMP’s modular Front-to-Back platform, the JUMP Data Management module can not only be stand-alone to compliment your existing Data Management information system but can be supplemented with other modules from the JUMP platform (Reporting, PMS, OMS, Compliance, Risk & Performance, Web Portal, Accounting, etc.).

If you want to see JUMP win in any of the categories listed above, please vote!  The polls close on October 8th, 2021.  Click here to vote.

 

 

 

The JUMP team would like to thank all of those who participated in our summer edition of JUMP Club U' on June 18, 2021, which took place in a hybrid format allowing our users to participate in-person if they so desired. This JUMP Club U' focused on regulatory reporting, with a focus on PRIIPS reporting and standard AMF reporting of non-compliance with investment rules, as well as other report types (ACR ADS, AIFMD, etc.).  The JUMP team continues to enrich its software suite in order to help our clients focus on their core business: investment management.   

 

PRIIPS Reporting

  What is PRIIPS regulation ?

• PRIIPS regulation standardizes key information documents (KIDs) relating to packaged retail and insurance-based investment products (PRIIPS)
• Objectives:  
  • Improve transparency, centralization, and standardization of financial information 
  • Enable customers to compare financial products and make the right decisions 

  Affected products :

• UCITS (mutual funds)
• Non-UCITS funds (as of January 1, 2022) 
• Alternative investment funds  
• Securitized products and non-UCITS deposits and structured securities 
• Insurance products   

  PRIIPS regulation in JUMP:    PRIIPS regulation is covered by JUMP at all levels:  

• At the Data level: integration of fund and product data (funds, shares, companies, asset classes, indicators, etc.), management of disclaimers, etc.
• At the Risk level: integration of calculated data or automatic calculation of risk indicators (SRI with VEV, MRM and CRM), performance indicators, performance scenarios, implicit and explicit costs 
• At the Compliance level: implementation of data presence and data update checks, as well as publication deadline checks 
• At the Reporting level: report formatting (KID, EPT, TPT, LPT, etc.), automatic generation and publication of reports, report validation workflow, production monitoring dashboard, etc.  

  JUMP: a single PRIIPS platform for all your teams   Examples of how your teams could be organized:  

• Legal team: Data entry and Monitoring 
• Reporting team: Design, Publication, Monitoring  
• Data management team: Data entry and Monitoring 
• Risk team: Monitoring, Compliance and Ratios 

  Why choose JUMP to meet the challenges of PRIIPS regulatory obligations?   After 15 years in the market, JUMP has been recognized by some of the major players in the industry for its expertise in investment management solutions, which include covering regulatory issues.  JUMP accompanies its PRIIPS service with continuous regulatory monitoring to offer a complete and sustainable solution, respecting the regulatory rules already in force as well as those to come.   JUMP offers its clients quick and customizable implementation of the PRIIPS package, all while adapting to the client's ecosystem and data, thanks to advanced customization capabilities (creation of custom ratios, checks, reports, dashboards, etc.).    JUMP's PRIIPS package allows you to:  

• Automate the generation and distribution of PRIIPS reports in multiple formats and languages
• Centralize financial data, calculations, and production processes related to PRIIPS regulations within a single platform 
• Manage and control report production through an automated workflow system (data, texts, and publication deadline verifications) 
• Share a common platform with all internal contributors  

 

Quarterly AMF reporting on breaches of investments ratios 

In this section, our guest speaker Lise-Hélène Brunon, Head of Compliance at AMPLEGEST and Vice President of the AFG Reporting and Accounting Commission, spoke about the new quarterly reporting of AMF breaches.   General information about new quarterly reporting:   

• Implemented by the AMF in its General Regulations
  • National provision, but similar toones already in place or under study in other EU countries  
• Affected players: Asset Management companies 
• What: reporting of non-compliance with investment rules of CISs and their financial impacts
• Objective: implementation of a permanent process for "downstream" supervision of industry players
• Timetable: implementation effective Q3 2021 
• Report frequency: quarterly
• Report content: lists of breaches qualified as “active”, following a standardized nomenclature of said breaches

  Main content of the report:    The Report can be broken down into 4 parts:  

1. 1. Identification of the breach
   2. Identification of the product concerned 
   3. Details of the breach of the product concerned 
   4. Analysis of the breach 

  Ways to implement the reporting in JUMP   In order to implement this reporting in JUMP, you should consider the following points:  

• Adopt standard AMF nomenclature for the results of UCITS, FIA, MMF, etc. - type regulatory checks (code, label, etc.)
• Be able to characterize active breaches using pre-trade controls, comments, detection of movements or differences in day-to-day positions, etc. 
• Be able to define the level of financial impact, potentially by calculating the P&L generated by the movement or excess exposure (via adjustment orders, marginal contribution to P&L, etc.) 

 

Annual AMF Reporting (ADS and ACR)

What is annual AMF Reporting (ADS and ACR)?   Each year, management companies must provide the AMF with: 

• Information relating to the management companies' control system. This is the Annual Control Report (ACR)
• Statistical information on staff numbers, accounting data, shareholder equity, and assets under management. This data constitutes the Annual Disclosure Sheet (ADS)

  What JUMP offers  JUMP can automatically enter information from line T3-A-1 to line T3-A-27 of the ACR ADS, as well as the following information:   

• Number of clients for investment advice purposes
  • including professional and non-professional clients as defined in the MiFID 
• Number of client accounts managed under mandate
  • including professional and non-professional clients as defined in the MiFID
• Number of client accounts for reception and transmission of orders (RTO)
  • including professional and non-professional clients as defined in the MiFID 

 

AIFMD Reporting

What is AIFMD Reporting?   AIFMD reporting is aimed at investment managers of investment products not covered by the UCITS IV directive, namely alternative investment funds, known as AIFs. The AIFMD governs EU investment managers who manage AIFs or third-country investment managers who manage EU AIFs.   

This report is generated from a template provided by European Securities and Markets Authority (ESMA).  

There are two types of report according to the volume of assets under management:   

• Simplified reporting: for AIFMs below €100 million (unleveraged) or €500 million (leveraged), which must transmit basic forms that include AIF manager information and AIF information for each managed investment vehicle 
• Full reporting: includes information from the simplified template, as well as the additional sheet on the leverage of each AIF 

  Report frequency is determined by the volume of assets under management and the presence of leverage   Target solution offered by JUMP   This report is composed of 2 parts:   

• One part which will be automatically fed by JUMP
• Another part that will be manually fed by the user, for example: 
  • Changes in reporting frequency or jurisdiction
  • Information on counterparties, dominant influences, or preferential treatments 
  • AIF strategies (a default solution is proposed) 
• In some cases, JUMP offers default values, which are entered directly into the report template

  The ROI of automating this reporting is around 2 to 3 days per AIF in order to reclassify assets according to AIFMD classifications and recalculate the gross performance.  

Our teams remain fully operational and at the service of our customers, not only to support them in their day-to-day operations but also to discuss the major challenges facing the investment management industry. The JUMP team continues to enhance its software suite on an ongoing basis in order to help our customers focus on their core business: investment management. 

 

Our community of certified partners continues to grow! We are pleased to welcome the latest graduating class of JUMP Technology Academy, who obtained their JUMP Certificate with honors. We are proud to gather, for the second time since March 2021, a group of experts eager to learn more about the JUMP Front-to-Back solution. Congratulations to our certified partners:

• Rija Raveloson from BM&A
• Robin Felix from BM&A
• Olivier Millot from Inadeo
• Patrice Icart from Inadeo
• Fabien Rodrigues from ALB Conseil
• Sergey Emelyanov from ALB Conseil

Join our community of certified partners now and become an ambassador of JUMP Technology’s innovative Front-to-Back Solution. Interested in joining the JUMP Academy Certificate Program or learning more about the different certification levels? Then click here to discover more.