Compliance: Trials and Tribulations in Asset Management

Celent explores how compliance technology is helping asset managers navigate an increasingly complex regulatory labyrinth.

Calls for increased regulation have reached a crescendo as cases of corporate fraud pepper the headlines. Asset managers and hedge fund managers have played a part in recent scandals emanating from Bayou Management, Wood River, and Philadelphia Alternative Asset Management.

In the report, , Celent explores the regulations impacting asset managers, provides an overview of the technologies that are helping to support compliance efforts, and reveals results of a Celent survey of compliance professionals at asset management companies to identify budget and staffing trends, the status and priority of compliance projects, and compliance challenges.

"Asset managers need technology to establish automated compliance routines that adequately provide a first line of defense for the firm and its clients," says Denise Valentine, senior analyst and author of the report. Some asset managers trying to control the ever increasing costs are relying on core infrastructure to meet requirements. At times a portfolio management system can meet requirements, but in other instances a new technology purchase is required.

"Asset managers have added point solutions where no infrastructure existed, for example, enterprise web-based email capture and retention systems. However, for other areas, many have turned first to current infrastructure to avoid added costs and to minimize operational disruption for new implementations and staff training," says Valentine. "Asset management firms will continue to devote significant time and resources to compliance throughout 2006 and into 2007. Implementing tighter controls, deploying automation of reviews, and monitoring certainly support good practices. However, the reality is that this is an iterative process which is in the early stages."

The 35-page report contains 14 figures and three tables. A table of contents is available online.

of Celent's Retail Securities & Investments and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.