Tailored versatility and efficiency

The distribution of own and third-party funds can be:

• Identified, where the client’s data is revealed to the fund administrator – responsible to the regulatory bodies and by the shareholders (statements, income reports, suitability, etc.)

• On account and order, where the customer’s data is retained in the distributor – which becomes responsible to the regulatory bodies and the quotaholder.

In this process, the distributor can distribute its own securities (own issuance) and those of third parties – which usually happens on account and order, where the distributor negotiates the rate and amount raised for individualized distribution among its customers.

In the case of self-issuance, the operational flow occurs directly with the treasury of the distributing financial institution.

The rebate amount is a benefit or a “commission” paid by the administrator or manager of a portfolio (fund, club or investment portfolio), and the calculation of this amount is based on the administration and/or management fee charged directly on the PL of that portfolio.

It is important to monitor the calculation of rebates in two views, such as expenses (administrators/managers) or revenues (distributors/officers/portfolios).

Quotaholder control services (liability controllership) of investment funds and clubs include:

bookkeeping of quotas; nominative registration of the holders of such quotas; registration of transactions and events involving such quotas; calculation and withholding of taxes; provision of information to regulatory bodies and information to quotaholders.

The control of shareholders of offshore funds comprises:

Control of umbrella funds with their various classes and series, hard and soft lockup processes, holdback, series rollup and quota disclosure controls in periodicity other than daily and monthly.

The control of shareholders of structured funds must respect some parameters:
different series, values of quotas of each series, profitability and taxation consistent with each type of fund and management of the number of shareholders, so that tax benefits are not lost.

The management of liquid funds, structured funds and investment clubs entails some ancillary obligations that have a specific flow for generating reports.

These vary depending on the destination legal, regulatory, or legal entity and the type of investment.

Shareholder control services (liability controllership) of investment portfolios and clubs include:

bookkeeping of quotas; nominative registration of the holders of such quotas; registration of transactions and events involving such quotas; calculation and withholding of taxes; provision of information to regulatory bodies and information to quotaholders.

The comparison of assets in relation to a benchmark and/or other investment options is made by the expectation of gross profitability.

bookkeeping of quotas; nominative registration of the holders of such quotas; registration of transactions and events involving such quotas; calculation and withholding of taxes; provision of information to regulatory bodies and information to quotaholders.

In the practice of mapping investments and gross/net profitability by asset and consolidated, a managed portfolio or a consolidated portfolio is created to demonstrate the global profitability, gross and net of taxes.

From this consolidation, it is also possible to demonstrate the profitability of the incentivized securities with the gross-up to make it easier for the client to compare investment options and evaluate past performance by comparing similar conditions.

Generation of report books with a consolidated view of the portfolio, a graphical or tabulated view of consolidated positions by class and by asset, statement of transactions by period and by asset, including cash and return statements with the respective comparisons.

Availability in a consultation portal (or via webservices) for dynamic visualization of data.

Consolidating positions and trading histories presents several challenges. By including operations in several markets and currencies, the difficulties of comparison and calculation of profitability are amplified.

Consolidation in portfolios and the simultaneous calculation of profitability in several currencies, compared to various benchmarks, can be carried out according to management needs.

Market risk is defined as the potential for a negative outcome due to changes in prices or market parameters. There are several methodologies applicable such as parametric or non-parametric value-at-risk (VaR), risk under stress conditions, diversifiable risk, etc.

The process of fund explosion – in which quotas are replaced by their equivalents in market assets – is fundamental for the correct measurement of such parameters.

Liquidity risk determines procedures for measuring the risk of a given fund:

• not be able to honour its current and future obligations without affecting its day-to-day operations; or

• Not being able to trade a particular position at market price (position size/market volume) and may incur significant losses.

The new control procedures and legal requirements oblige the fund manager to monitor the book-entry controls carried out by the administrators and custodians, being able to use portfolio mirroring, replicating the data sent by the administrator in the manager’s environment.

The system allows the creation of end-of-day framing rules or simulations throughout the day to ensure compliance with legal and managerial requirements.

The movement, valuation of assets, classification, control of expenses, revenues and quota fluctuation are replicated daily in the manager’s environment and reconciled with the data sent by the administrator.

More and more distributors of financial assets are starting to manage their clients’ checking accounts and investment portfolios in several institutions and in different markets and currencies, regardless of whether the client has a managed portfolio, consolidates or simply trades securities.

Mark-to-market allows you to know how much you would receive today if you sold the respective asset, whether it is fixed income, variable income, derivative or other.

This process is indispensable for investment funds and also in managed portfolios or individualized investments.