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Cordium – Best European Regulatory Advisory Firm

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2014 was a busy year for Cordium, not least because of the uncertainty that arose around the implementation of the AIFM Directive. Originally, the FCA had set the registration deadline for UK AIFMs to be 22 January, before eventually accepting HM Treasury’s interpretation of the law and setting 21 July 2014 as the final filing deadline. As Stephen Burke (pictured), Managing Director, EMEA, reflects: “Our clients were continuing to look at what the deadlines were, what they needed to do and by when. It was a significant issue for them.”

 On top of this, managers also needed to start reporting under EMIR and prepare for FATCA. All three were fairly significant pieces of regulation that weighed heavily on the whole hedge fund industry. It was important therefore to help guide our clients through the changes in good order.”

As part of Cordium’s AIFMD offering last year, the firm created the Cordium Total AIFM Solution (CTAS) to help managers establish a fully functioning AIFM in Malta which will handle the risk management function for both EU and non-EU funds, while delegating portfolio management back to managers in the major management centres. 

This product helps managers utilise the attractive fiscal and regulatory arrangements available from Malta, while the manager retains full ownership of the Malta AIFM and Cordium takes care of all the operational and compliance demands. 

“CTAS has been developed for certain types of managers who would benefit from a Malta-regulated firm in their structure but need to achieve the required level of local substance. We think this will be of particular interest to non-European firms that would like a European AIFM and to existing European firms who can create some economic value outside of the higher tax domiciles from which managers tend to be operating,” confirms Burke. 

As the regulatory dust of 2014 started to settle, the last major hurdle for managers to go through was Annex IV reporting. A large number of Cordium’s clients filed their first reports at the end of January and will now face quarterly, semi-annual or annual filings on an ongoing basis. Cordium worked with Indus Valley partners to build out its Annex IV solution; known as the Cordium/IVP RAPTOR regulatory reporting solution.

““This year is more about consolidation for managers; getting used to the regulatory environment and, more importantly, getting the most out of it. Most people are finding it a challenge to market funds in Europe, having to deal with the post-AIFMD private placement regimes as well as changes in Switzerland, which also amended its regulatory regime,” says Burke. Indeed, managers will now need to have a legal representative and paying agent in place to market their funds to Swiss investors. 

Cybersecurity is another focal point. Cordium has partnered with IP Sentinel to develop a series of key indicators “which our consultants are currently working through with many of our clients to help identify where they may need to pay more attention to their data security as risks and regulatory expectations change”, notes Burke. 

Cordium is currently focused on delivering its capabilities via a new software platform it has developed called Pilot, to help firms deliver their compliance more effectively.

On winning this year’s award Burke comments: “This award from the readers of Hedgeweek is testimony of the hard work Cordium employees put into helping our clients navigate the increasing complex regulatory environment.”

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