AFTAs 2014: Best Compliance Initiative—BNY Mellon

This year it was BNY Mellon taking that award for best compliance initiative, with its Alternative Investment Fund Managers Directive (AIFMD) solution earning the top honor.

AIFMD—which was created by the European Union and has created headaches on both sides of the pond—regulates the management of alternative investment funds sold to EU investors or managed by EU managers. The regulation was put into place this year, with firms required to comply by July 22.

Despite having recently released a solution for Ucits IV, BNY Mellon took a deeper look at the AIFMD regulations, essentially taking four steps toward compliance.

BNY Mellon client technology solutions’ asset servicing technology group developed the Depository Oversight and Reconciliation Application (Dora) to obtain and store data from internal BNY Mellon systems. The beauty of Dora is that it was built with future regulations in mind, as the basis for it is a set of common themes—transparency, asset safekeeping and asset valuation. This will prove valuable down the road, as BNY Mellon will be able to leverage it for other regulatory solutions.

Dora also features a workflow and content management tool designed to allow for rapid modifications via SharePoint technology.

The beauty of Dora is that it was built with future regulations in mind, as the basis for it is a set of common themes—transparency, asset safekeeping and asset valuation. This will prove valuable down the road, as BNY Mellon will be able to leverage it for other regulatory solutions.

In addition to Dora, BNY Mellon used the Charles River trading and compliance system to support AIFMD compliance monitoring. As is the case with Dora, there is also the possibility of future expansion capabilities, if necessary, making it even more valuable going forward.

BNY Mellon also designed a common file interface to exchange data with internal systems, thus allowing BNY Mellon to greatly reduce its onboarding time thanks to the common format.

Finally, BNY Mellon adopted a Pentaho solution to extract, transform and load client data when it’s not possible to use BNY Mellon’s standard file format. The solution is scalable, configurable and cost effective and further increases the breadth and efficiency of BNY Mellon’s onboarding process.

With the recent announcement of Ucits V, which will take effect in 2016 and has a similar set of regulations to AIFMD, BNY Mellon will be able to use Dora and its AIFMD platform to develop a solution for Ucits V as well.