The new SWIFT white paper proposes a series of preparatory steps to be taken when building a SEPA migration plan.

These include:

• Start by building a clear picture of the instruments you are already clearing, where – channel by channel, transaction type by transaction type
• Create a ‘SEPA checklist’ detailing what exactly you need to migrate to SEPA compliance
• Determine the business value for you of achieving compliance: does it support your overall strategy for clearing?
• Select the right messaging provider to support you

Initially GIPS were born out of the frustration of pension fund trustee’s inability to differentiate between good and bad asset managers in the mid 1980s. Without standards it appeared that all managers were above average performers. Marketing departments of asset managers would “cherry pick” good performing accounts, choose beneficial time periods, hide important caveats in the small print and self-select return and valuation methodologies to ensure good but non-representative performance.

What is Liquidity Risk? We can provide at least two definitions for it.

Funding Liquidity Risk. This definition refers to the Asset Liability Management (ALM) of an institution – normally a bank – identifying the gaps in the funding of the institution’s assets. E.g. in a bank there is usually a funding gap as the liabilities contain short-term deposits in large part against assets that invest in longer term horizons. Funding gaps generate a funding risk, the risk of rolling the short term funding at growing costs or even the risk of not being able to roll/over the shorter term liabilities.

After 20 years of investment in straightthrough processing (STP), what industry problems still need to be solved, and how do they fit into today’s operational risk framework?

The increased volatility of capital markets, the significant growth of derivatives and the occurrence of several incidents (subprime crisis, Madoff and Kerviel affairs) motivated professionals in asset management to focus on risk measurement, in order to meet the seminal challenge of the asset manager - investor relationship.

The paper states that whilst the SEPA landscape is still far from clear despite the End Date regulation proposal, there are already concrete steps that financial institutions and infrastructures can take to reduce the pain and get ahead of the game:

• Act wisely - have a clear view of your ambitions and those of your competitors in the European retail payments space and size investments accordingly whilst remembering that cheaper is not necessarily better.
• If you do have ambitions in the European retail payments industry, go for the "no regret" messaging solution; that which is future-proof and of which the price remains stable and predictable over time.
• Analyze, map and prioritise all payment flows that will need to be migrated - this is a must.
•  Based on the facts that are known today, plan ahead and foresee alternative scenarios, including the possible need for "backward or switch compatibility" should external factors impact the project.

With the passing of the global financial crisis of 2008-09, many things have changed for global finance and for the asset management industry in particular. As we now know all too well, major financial shocks can no longer be contained. They spread with amazing speed, both geographically and across asset classes and financial intermediaries. Financial interconnectedness can bring great benefits, but it also generates large systemic risks, and there are few places to seek refuge from its consequences.

When it comes to online banking and online buying, consumers have fundamentally different mindsets and expectations. When banking online, consumers typically focus on a specific task, and they place a priority on both utility and ease of use. High levels of security and privacy are expected.

Over the past two years, Merlin has published several white papers that are designed to highlight and help managers implement industry best practices – from shoring up their business model to identifying their target investors based on the development stage of their fund.