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FTF News: Citi Services to Target SEC Mutual Fund Rules

LiquidityBook

Mark Dowd

Mark Dowd

Citi has been working with MSCI and Confluence to get its clients ready for the regulator’s new mutual fund regulations
By Eugene Grygo

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.”

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