Citi has been working with MSCI and Confluence to get its clients ready for the regulator’s new mutual fund regulations.
Citigroup is partnering with MSCI and Confluence to develop “user-friendly services” that will help the bank’s clients adjust to the SEC’s reporting modernization and liquidity risk management rules, slated to take effect later this year.
“The SEC’s sweeping reporting modernization and liquidity risk management rules place an added operational burden on asset managers,” according to Citi officials. “Compliance with the rules requires additional market data, analytics and new reporting infrastructure.”
Citi officials also argue that the SEC rule changes “will have a dramatic impact on mutual funds as they will substantially increase automation, data collection and reporting requirements. Regulators and investors will have a level of visibility into mutual funds never before obtained”
The SEC changes will impact Citi’s Global Custody and Fund Services platform, “which offers clients access to 105 markets with 61 proprietary branches and subsidiaries and 44 agent banks,” Citi officials say. The bank offers local market expertise, institutional resources and a platform to support complex securities services.
By partnering with MSCI and Confluence, Citi hopes to facilitate compliance with the SEC’s new reporting modernization and liquidity risk management rules.
For MSCI’s part, the vendor will “optimize the delivery of its data and risk and liquidity analytics for easier integration into Confluence’s Unity NXT Regulatory Reporting solution,” according to Citi. “These analytics include the calculation of market risk sensitivities at a portfolio and position level, and the classification of funds’ investments into liquidity buckets, as outlined in SEC Rule 22e-4.”
Ahead of the rules taking effect, “asset managers are making their final decision on what solutions to implement as the SEC compliance deadline approaches,” says Jorge Mina, head of MSCI Analytics, in a prepared statement. “MSCI seeks to help them establish prudent liquidity risk management practices and an efficient N-PORT reporting solution.” MSCI’s services includes indexes, analytical models, data, real estate benchmarks and ESG research.
The data that Citi Fund Services “has already consolidated on the Confluence platform during our 20-year partnership will provide a strong basis for the sharing and reuse of data required by SEC Modernization,” says Todd Moyer, chief operating officer (COO) at Confluence, in a prepared statement.
“Reusability of data is the cornerstone of regulatory reporting,” Moyer says. “With the Unity NXT Regulatory Reporting platform, Citi can leverage a single, validated regulatory dataset that can be reused across the entire enterprise rather than having to exchange multiple data files to meet multiple filing obligations.”
The goal is to provide Citi clients with “easy and efficient access to the data and analytics they can leverage to comply with the SEC’s Form N-PORT requirements,” Citi officials say.
“We have been working diligently over the last several months to ensure a proper implementation for our clients,” a Citi spokesperson tells FTF News. “Citi’s solution is a turn-key offering that will require virtually no intervention or development from our clients. This allows asset managers to focus on oversight and general adherence to the SEC rules.”
The new services will not require Citi clients to become customers of MSCI and Confluence. “Citi’s clients will not need to enter into any new relationships beyond Citi,” the Citi spokesperson says. “The rules and services will go live on June 30th and Citi’s clients will have access at that point. Citi’s clients are currently going through training and getting demonstrations of the service to ensure a smooth transition when the rules go live.”