SEC Expanded Risk Regulation - How to Assess Resource and Requirement Needs
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Transcript of SEC Expanded Risk Regulation - How to Assess Resource and Requirement Needs
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Expanded Risk RegulationAssessing Resources & Requirements
SPONSORED BY:
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Arthy Kumar
Chris Mancini Senior Product Marketing Manager – Investments, Workiva
Senior Success Manager and Program Manager, Workiva
WELCOME OUR PANEL
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N-PORT
LQRP
RRP (proposed)
N-CEN
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N-PORTKey Elements• Monthly asset reporting at the security level• Security attributes including
Currency exposureForeign security and standardized derivative exposureSecurities lending informationFuture exposure detailLiquidity risk categorization
Systems: 3-5 (portfolio acct., custodial files, accounting, risk, performance)Departments: Portfolio mgmt., reporting, accounting, finance, fund admin., riskRelative Resource Demand:
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Liquidity Risk Program (LQRP)Key Elements• Fund boards must maintain a program including
Appointed officer reporting to the boardDocumented policies and methodology
• Review and assess program annually• Must include
Security categorization (3 days to cash, 7 days to cash, 7 days to sell, 7+ to sell)Monthly monitoring, recategorizing, and documenting
Systems: 2-3 (portfolio acct., custodial files, risk, performance)Departments: Portfolio management, new risk officer reporting to board, legalRelative Resource Demand: Monthly,
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Resolution and Recovery Planning (RRP)Key Elements• Succession plans, ownership control, and transfer of ownership• Recovery and continuity
Cybersecurity and systems complianceCritical system inventory and backupData access managementRisks, monitoring, and testing
Vendor attestationAlternative communication and ways to carry out critical business activities
Systems: AllDepartments: Legal, technology, business linesRelative Resource Demand: annual,
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N-CENKey Elements• Financial affiliations• Index tracking error• Service providers• Securities lending activity
Systems: 3-5 Departments: Legal, fund admin., accounting, portfolio managementRelative Resource Demand: annual, neutral because NSAR goes away
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Liquid
ity
Risk
Category
Monitoring
Currenc
y
Exposu
re
System
Risks
Vendor Attestati
on Credit Risk
MonthlyBy Position
RRP
The Wave
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The Ride
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The Challenges
Portfolio Accounting
Custodial Files
Risk and Performance
Reporting
Data resides in multiple systems
It's extracted and assembled into unstructured data...formats, file locations, or fields
Data is moved or copied multiple times by different departments to address a number of filings and/or processes
And turnaround times are short
Accounting Financials
Multiple Data Sources Extracted & Assembled
Data Proliferates & Is Over-handled
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Shared Data, Systems and Processes
From LQRP
N-PORT
Shareholders - N-CSR(S)
N-CEN
RRP
Use smart database technology to more easily index and share data across similar processes
Liquid & Securities Details
ThresholdsTest
Liquid & Securities Details
Securities Info Performance Financials
Performance Financials
P & P
More Sec. Detail
FinancialsServicer Info
Servicer InfoData Sec.System Backup
Succession
Entity Affl.
Entity Affl.
Sec. Lending
MD, Notes, Other Operating detail
Board Rpt.
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What you can do.• Inventory your processes
create process flow mapsanalyze to identify common service providers, systems, procedures, functional contributors
• Determine where and in what systems to evolvebest location to store informationwhere logic will fit best to create automationhow flexible will it need to be
• Build high-level requirements and compare to alternatives
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CHRIS MANCINI | Senior Product Marketing Manager – Investments, Workiva