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Prudential Reporting Services

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Regulators continue to increase their focus on a firm’s capital monitoring and forecasting, and regulatory reporting processes. In turn, investment management and advisory organisations continue to seek expertise in regulatory oversight. 

ACA's experienced prudential team are on hand with a wide range of solutions designed to help make your regulatory reporting obligations as simplified and seamless as possible. 

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ICAAP Services

Organisations subject to European Union financial services supervision, including those making discretionary investment management decisions (outside the scope of the AIFMD), must conduct an assessment of regulatory capital held. The rules oblige a firm to:

  • Implement a formal Internal Capital Adequacy Assessment Process ("ICAAP"), which includes a quantitative assessment of capital held together with a qualitative assessment of individual risks and associated mitigants, stress testing, reverse stress testing, wind down analysis, and an expression of confidence that capital held is commensurate with risks faced.
  • Update on an event-driven or at least annual basis the written documentation of that process to reflect the very latest developments to the firm’s business model.

ACA assists with the development of the key processes underpinning the ICAAP and with the preparation of the written ICAAP Report by:

  • Helping firms to quantify risk appetite and identify their major sources of risks
  • Reviewing and documenting risk mitigation and the control environment
  • Quantifying capital requirements associated with identified risks
  • Preparing financial forecasts and stress testing scenarios
  • Creating a wind-down plan and performing the associated calculations

Regulatory Reporting

The regular reporting that organisations must give to regulators can be time-consuming and resource-intensive to prepare and complete. ACA has extensive experience with executing on this type of reporting in key jurisdictions, including the US, UK and Malta. Hundreds of financial services firms over that time have trusted ACA to file this important information. 
 
Ways ACA can help include:

  • Providing integrated regulatory advice to principals and Head Office, as required
  • Forecasting prudential resources and robust capital planning 
  • Preparing and filing regulatory returns on systems provided by supervisors, including GABRIEL in the UK reporting (all financial and prudential data items)

Transparency or Annex IV Reporting Solutions

With few exceptions, non-UCITS funds that are marketed into the EEA are classified under European rules as Alternative Investment Funds (AIFs). Managers of AIFs, regardless of where they are located, are required to perform ‘Transparency’ or ‘Annex IV’ reporting within the EEA. Where the manager is an EEA authorised Alternative Investment Fund Manager (AIFM), it must report to its home state regulator in respect of all funds managed and marketed in the EEA. Third country managers must report to the relevant regulator of each jurisdiction in which an AIF is marketed. The scale and scope of this reporting can, thus, be significant. 
Further, the mandatory reporting taxonomies are highly granular. Each contains 38 detailed questions relating to the AIFM and circa 300 pertaining to each AIF, covering both static and non-static information. The information to be reported must be obtained from a variety of sources, typically including:

  • The AIFM’s own accounting and prudential records,
  • Transactional, position and valuation data maintained by fund administrators, and
  • Other third-party sources and systems.

The reporting frequency is determined by the Assets under Management of AIFs managed and / or marketed in the EEA, and range from a quarterly to annual requirement. 

ACA can help ease the burden of this reporting requirement. However simple or complex a firm’s transparency reporting needs are, our unparalleled regulatory and reporting expertise can assist. Our transparency reporting solutions include:

  • Ad hoc advice on discrete questions relating to taxonomies or Directive interpretation
  • The review and/or challenge of in-house or administrator prepared filings
  • Full “managed service” outsourcing for EEA and non-EEA AIFMs required to report to national regulators

Insights and Resources

 

Below are some financial and regulatory reporting resources you can read for additional information or guidance: