Report: "Clear enough? Finding the best level of transparency"

In the name of transparency, asset managers are increasing their calls for more data about the distribution supply chain. The primary motivation is commercial, and regulation has given further impetus to this demand.

Rules designed to halt money laundering, on the one hand, and to prevent product mis-selling (MiFID II) on the other are being used to justify the increased sharing of client data with managers. In the funds industry however, the possession of customer-level data is a burden.

Balance between transparency and efficiency

If total transparency obliges asset managers and their transfer agents to hold records of every individual investor, a significant administrative duty will be created. And, more importantly, the potential duplication or triplication of administrative work may reduce the overall efficiency of the funds market.

The transparency trap – industry experts share their views

As part of the report, a panel of industry experts have discussed data regulations, the challenge of fragmented market practices as well as the best ways to achieve efficiency and the future role of technology. Bernard Tancré, Head of Investment Fund Services at Clearstream proposes: "We want to separate the information that needs to be processed from the data the asset managers are actually looking for."

Issues raised by new regulatory pressures

In a concluding interview, Mark Gem, Chair of the Clearstream Risk Committee, questions why it has become so challenging to fulfil compliance requirements around transparency and disclosure in the collective investments industry, when these tasks have been managed efficiently for cash securities instruments for many years. After all, it is important to focus on where the risk is.

Built on asset safety

Clearstream is working constantly to offer efficient, automated operational processing and to maintain the highest standards of asset protection. However, applying AML standards requesting information that is not already captured under the Enhanced Due Diligence (EDD) provisions of correspondent banking standards issued as part of the ESA (European Supervisory Authorities) guidelines, is not a good way forward for the industry.

As a leading fund market infrastructure, Clearstream delivers state-of-the-art solutions built on asset safety and distribution efficiency. With the launch of the new Fund Desk distribution support services, Clearstream is acting on asset managers’ and distributors’ calls for more data and transparency along the distribution chain.