Fund custody and administration / David Loader.

Format:

Book

Author/Creator:

Loader, David, author.

Language:

English

Subjects (All):

Mutual funds.

Mutual funds--Europe.

Europe.

Physical Description:

1 online resource (346 pages) : illustrations (some color), tables

Edition:

1st edition

Place of Publication:

Amsterdam, [Netherlands] : Academic Press, 2016.

System Details:

text file

Summary:

Fund Custody and Administration provides an overall perspective of investment funds without limiting its analysis to specific fund structures, as other books do. Since governance and oversight of investment funds are now major regulatory requirements, administrators and custodians must place greater emphasis on the custody and safekeeping of fund assets, on the independent and robust valuation of the assets, and on collateral management. By focusing on both the asset transactions made by the investment manager for the portfolio and on the transactions in the shares or units of the fund itself, it gives readers insights about the essential elements of investment fund management and administration, regardless of their geographical backgrounds. Explores the key stages in the investment process, from setting up a fund through its launch and operation Explains the roles of participants as well as the ways regulation affects the fund and its operation Describes the work flow associated with custody and administration procedures and processes Defines the role of compliance and risk management in the context of the fund and also how compliance requirements apply to custodians and administrators

Contents:

Cover

Title Page

Copyright Page

Contents

About the Author

Preface

Introduction-What Is Fund Administration and Custody

Agreements

Advantages of 3rd Party Administrators and Custodians

Fund Relationship Structure

Administration Structure

Comparison With Retail/Mutual Funds

Fund Set Up

Custody and Depositary Services

What is the Role of a Depositary?

Types of Fund

Summary

Part 1 - Introduction to Investment

Investment environment

Islamic investment funds

Investment Objectives

The Meaning of an Offering or Placement

The Meaning of a Unit or Share of an AIF

The Meaning of Investor

PR 2.3 Minimum Information to be Included in a Prospectus

Collective Investment Schemes (CIS) and the Investment Management Process

Unregulated funds

Asset Classes-Securities, Derivatives, Alternatives

Investment strategies

Using derivatives

Portfolio management

Investment performance

Risk versus reward

Performance ratios

Alpha Ratio

Beta Ratio

Sharpe Ratio

Treynor Ratio

Investment management fees and costs

Annual Management Fees

Performance Fees

Initial and Exit Fees

Part 2 - Regulation and Fund Structures

Overview of regulation

Regulation and directives

AIFMD and AIFMs

EEA Firms

Retail funds

UCITS Directive

Money laundering

Principles and recommendations

Fund Structures-Companies, Trusts, Partnerships, Common Funds

Fund of funds

Multimanager funds

Other structures

Alternative Investment Funds

Hedge funds

Open Ended and Closed Funds

Fund Jurisdictions

Key Players in the Operation of a Fund

Retail/mutual fund custodian

Fund administration

Prime broker/brokers

Setting up a Fund

Outsourcing

Documentation and agreements

Summary.

Part 3 - The Day-to-Day Operation of a Fund

Introduction

Process workflow

Investment capital

Investment process

Asset servicing

Fund operations

Valuation and accounting

On-exchange pricing and valuation issues

Valuation checklist

Income and expense

Margin and collateral

Distributions

Performance fee calculation

Management Information

Transfer agency

Subscriptions and Redemptions

Custody and depositary

Global custody

Life Cycle of Derivatives Transactions

Settlement of On-Exchange Derivatives

Life Cycle of the Settlement of OTC Derivatives

Securities lending and borrowing

Securities Lending

Securities Lending Defined

Characteristics of securities lending

Uses of securities lending

Securities lending precautions and controls

The Risks

Borrower Default

Day-Light Exposure

Settlement Delays

Market Inefficiencies

Collateral

Securities

Certificates of deposit

Government bonds

Equities

Irrevocable letters of credit (L/Cs)

Securities lending agreements

Role of the prime brokers/global custodians

Nondiscretionary program

Discretionary (or managed) program

Operating the pool

Benefits and entitlements

Lenders' rights

Manufactured dividends

Role of the custodian or intermediary

Importance of accuracy and timeliness

Actions required

Implications for collateral

Repurchase agreement (repo)

Securities lending relationship structure

Margin Calls and Collateral Management

Compliance

Part 4 - Risk

Risks faced by a fund and how the administrator can assist the fund to manage the risks

Operational risk

Types of risk

Risks Faced by an Administrator and Custodian

Cased Studies and Illustrations of Risks and the Management of the Risks.

Managing Operational Risk

Risk Logs/Incident Reports

Subjective versus Quantitative Analyses in Identifying Risks

Self-assessment and measuring risk

Risk scenario analysis

Conflict resolution exercise

Background

Exercise

Risk of fraud in finance

Risk terminology

Glossary of risk terminology

Possible Future Changes and Challenges in the Fund Administration and Custody Environment

Part 5 - Introduction to derivatives

Exchange traded futures and options

Definitions

Derivatives

Forwards

Futures Contracts

Swaps

Options

In-the-Money

At-the-Money

Out-of-the-Money

Long and Short Options

Options on Futures

History of Exchange Development and Growth

First Traded Futures Exchange

Emergence of Financial Futures Markets

Futures Exchanges in Europe

Futures Exchanges in Asia

First Options Exchanges

Futures and Options Exchanges Today

Futures and Option Contract Specifications and Diversity

Tick Size

Product Range

Equity Index Futures

Commodity Futures

Basic Trading and Hedging Strategies

Trading

Trading Strategy 1: Market Direction (Using Futures)

Trading Strategy 2: Speculating (Using Options)

Trading Strategy 3: Gearing

Trading Strategy 4: Arbitrage Trading

Hedging

Hedging Example 1: Potato Farmers

Hedging Example 2: Fixed Rate Mortgages

Market Structure

Role of an Exchange

Role of the Clearing House

Basics of Futures Fair Pricing Theory

Equity Index Futures Fair Pricing

Settlement and Margining

Initial Margin

Interest

Intraday Margin

Spot Month Margin

SPAN Margin System

Margin Offsets

Variation Margin (Settlements)

Margining Customers

Single Currency Margining and Settlement

Treasury Management

Interest Rate Calculations.

Usage of Futures and Options in Investment Management

Pension Funds

Basic Illustration of Derivatives Use in Asset Allocation

Income Enhancement

Index Tracking

OTC derivatives

Products

Forward Rate Agreements

Interest Rate Swaps ("IRS")

Currency Swap

OTC Options

Common OTC Option Types

Total Return Swap

Credit Default Swap

Contracts for Differences (Equities)

Settlement of OTC Products

Confirmations

Post Trade Environment

Event Calendar

Other Settlement Issues

Derivatives Valuation and Accounting

OTC Derivatives Clearing

Appendix A-useful reference websites

Appendix B-OCC STANS

Methodology

General Features

3. Intraday Withdrawal and Deposits of Collateral

Appendix C-Dependence and Concentration

Appendix D-Suggested Further Reading

Part 6 - Summary-Fund Administration Notes

Exercise Answer

Part 7 - The Future of Fund Custody and Administration

Appendix 1 - The Investment Association Categorization of Funds

Appendix 2 - Source-Investment Association

Appendix 3 - Glossary of Risk Terminology

Appendix 4 - Organization of the SESC

Appendix 5 - Reporting Annex IV Transparency Information Under the Alternative Investment Fund Managers Directive

For full-scope UK AIFMs, small authorized UK AIFMs and small registered UK AIFMs

Transparency reporting requirements

Reporting to the FCA

Transparency Information to be Reported

Form of Transparency Information Reports

Identifying the AIFM and the AIFs

Transparency Reporting in Relation to Different Fund Structures

Feeder AIFs

Funds of Funds

Umbrella and Subfund Structures

Frequency of Transparency Reporting

Small Authorized UK AIFM

Small Registered UK AIFM

Full-Scope UK AIFM.

Transparency Reporting Submission Dates

First Transparency Reports

Example

Reporting transparency information to the FCA

GABRIEL reporting

Access to GABRIEL

Full-Scope UK AIFMs with Quarterly Sep. 30, 2014 Reporting Obligations

Full-Scope UK AIFMs and Small Authorized UK AIFMs

Small Registered UK AIFMs

All AIFM Types-Initial Action Required in GABRIEL

Ongoing Responsibility

Submitting Transparency Reports Using GABRIEL

Missed or late transparency reporting

Transparency reporting requirement-quarterly reporting period ending Sep. 30, 2014

More information on transparency reporting

Appendix 6 - Questions and Answers Application of the AIFMD

Question 1: First application of the remuneration rules

Date Last Updated: 17 February 2014

Question 2: Remuneration rules in case of delegation of portfolio management or risk management activities

Question 3: Annex IV of the AIFMD

Question 4: Notifications of AIFs

Question 5: Reporting under Article 42 of the AIFMD

Appendix 7 - China Securities Regulatory Commission (CSRC)

Suggested Further Reading

Appendix 8 - October 2015-Top 10 Performing Funds

Appendix 9 - Global OTC Derivatives Market-Source BIS

Appendix 10 - Global OTC Derivatives Market-Source BIS

Appendix 11

Glossary of Terms

Useful Websites and Links

Index

Back cover.

Notes:

Includes index.

Includes bibliographical references at the end of each chapters and index.

Description based on online resource; title from PDF title page (ebrary, viewed August 1, 2016).

ISBN:

9780128499016

012849901X

OCLC:

961353693