Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

AIFMD Annex IV reporting made simple

Related Topics

By Bradford Rowley (pictured) – Any association between Annex IV and the word ‘simple’ may appear to be an oxymoron as the Annex IV fund and manager filing typically requires the completion of a combined 339 questions on a recurring basis for larger managers.

These questions bring together many different data points typically found in different departments of fund administrators and across different systems. Where fund administrators have adopted a multi-platform environment with different systems for each of portfolio management, transfer agency, general ledger and risk they now find themselves having to combine the outputs into a single Annex IV filing and then compile those results into an XML file.
 
PFS-PAXUS has adopted a different approach from the beginning by building a fully integrated platform for fund administration that combines all the elements into a single database thus making Annex IV ‘simple’, or at least ‘simpler’.
 
It has been said that for some fund administrators the compliance team is likely to end up being the biggest department in their asset servicing operation. Whilst this is possibly an exaggeration it does reflect the changing nature of the administrator’s role. The Annex IV reporting obligations by fund managers under the Alternative Investment Fund Managers Directive (AIFMD) is one of the most significant new reporting requirements in recent years and is similar in scale to the US Form PF requirement. This directive requires AIFMs to report in the ESMA (European Securities and Markets Authority) format on a wide variety of areas, including investment profile, portfolio concentrations, fund performance and the risk profile of their AIFs.
 
The ‘simple’ approach taken by Pacific Fund Systems Limited (PFS) is different from many competitors. As PFS-PAXUS is a fully integrated fund administration platform, most of the data elements required for population in the Annex IV already reside in a single relational database. Populating the Annex IV report can be achieved with a single button click with the results of the system calculations available for user review. Many participants in the industry are building data warehouses to combine all the required data elements from their different systems.
 
However, this layer of complexity is largely removed due to the integrated architecture of PFS-PAXUS. The PFS-PAXUS solution automatically generates the XML file in ESMA format for submission to local regulatory authorities.
 
Although not all Annex IV data elements are available from within PFS-PAXUS, any additional information can be easily added into the Annex IV filings by direct editing of the report before generating the XML file for submission. For example, in Section 24(1) there are 120 questions which typically can be auto-populated to 86 per cent by PFS-PAXUS leaving only 14 per cent of the questions of user input where the questions are subjective or the data is not currently available in PFS-PAXUS.
 
It is no surprise that other industry participants are racing in an attempt to combine separate systems, but PFS-PAXUS has been integrated from the start and the benefits of full integration are now more profound than ever.
 
Bradford Rowley is a chartered accountant with 16 years of fund accounting experience. Bradford has been working with Pacific Fund Systems Limited since 2004 in European and North American markets

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured