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HIGHLIGHTS FROM FTF’S EVENTSEditor’s Note: The following excerpts are from the recent online coverage of FTF conferences and other events.Digitization and the Web Help Advance Client Reporting (April 2, 2014, by Louis Chunovic)Client reporting, the essential deliverable from performance measurement infrastructures and practices, is evolving, as revealed by the questions on the table at a recent panel discussion that was part of Performance Measurement New York, a one-day event for professionals, held in midtown Manhattan.One participant, a performance reporting veteran at a major institution, calls for improving investor education, for transparency and enhancing industry reputation, and for a better understanding of mitigation of risks and better overall communications.Another, an investment analytics specialist, says the “demand wasn’t there” among his firm’s client base when it came to compliance with GIPS, the voluntary Global Investment Performance Standards, created by the CFA Institute.Instead of touting full compliance, the specialist’s firm takes a “GIPS-lite approach.” The firm doesn’t claim compliance, but is “looking more at operational controls and practices,” the specialist adds.“High-net-worth investors are looking for clear comparisons,” says another panelist, a specialist in process automation who is a manager at a global consulting and technology provider.Bigger Volumes Meet Fewer FCMs(April 4, 2014, by Eugene Grygo)Fewer futures commission merchants are handling greater volumes of U.S. customer segregated funds compared to a decade ago, resulting in 75 percent of these funds being held by 10 major FCMs, reports John P. Needham, president of Needham Consulting, in his presentation for FTF’s DerivOps Chicago conference.The segregation of funds stipulates that broker-dealers or other kinds of securities firms keep their customers’ assets separate from the firm’s own assets. In fact, the CFTC specifies that all customer funds for trading on designated contract markets (futures exchanges) must be kept apart from the FCM’s own funds, including cash deposits and any securities or other property deposited by customers to margin or guarantee futures trading. ... Needham says the number of FCMs has decreased over the past decade while the amount of U.S. customer segregated funds has increased from $71 million in 2003 to $143.7 million in 2013. In 2003, 177 FCMs submitted the required Financial and Operational Combined Uniform Single (FOCUS) Report or Form 1-FR-FCM to the CFTC, Needham says. “In 2013, only 100 did.”Also, 11 years ago, 102 FCMs reported to the CFTC that they held customer segregated funds, Needham says. But, by December 2013, just 69 FCMs reported that they are clearing customer segregated funds. ... “As of December 2013, more than three-quarters of all the U.S. customer segregated funds were held at just 10 FCMs.”EDITOR’S NOTE08Pushing the Edges of ComplianceThe world of post-trade operations is living through an Age of Compliance that is not slowing down.The reach of compliance now includes social media channels that are opening up great new possibilities for firms to market their services and to better meet customer needs. While firms are learning that investment in social media compliance does the job, it also requires businesses to make a significant commitment in terms of resources and time (Page 11).Unfortunately, just as one area of opportunity opens up, the threat of cyber-attacks is on the rise (Page 14). So are demands by regulators that firms start to think seriously about securing all aspects of the trading enterprise from these relentless and, sadly, effective cyber-attacks.The expanding definition of compliance also encompasses the tried and true, such as the venerable over-the-counter voice-based trading businesses that must submit to new compliance demands (Page 22). Regulators have not forgotten that voice-based trading is still around for many instruments that do not lend themselves well to 21st-century technology. Transactions that are negotiated and finalized via trading desk-based calls and mobile phone systems have to be recorded and stored efficiently to meet Dodd-Frank and MiFID II stipulations.FTF News also provides a sampling of the online Minding the Gap blog (Page 10) and the online case studies that provide readers insight into important projects (Page 25).Although not strictly compliance-related, there is a global push to shorten settlement cycles for securities transactions. There is resistance in the U.S. to moving from trade date plus three days to trade date plus two days (T+2). The advance will challenge buy-side firms in the U.S. to streamline infrastructures and workflows, particularly back-office infrastructures. FTF News reviews the situation and looks ahead to what’s next (Page 27).We also look ahead to the SIBOS 2014 Boston conference, put on by financial messaging and services cooperative SWIFT (Page 30). The event gets underway at the Boston Convention & Exhibition Center from Sept. 29 to Oct. 2.Lastly, we take a little look back to the FTF News Technology Innovation Awards gala aboard a yacht in New York Harbor (Page 35).Best regards,Eugene Grygo Chief Content Editor Financial Technologies Forum LLCFALL 2014 | FTF NEWS MAGAZINE