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GC : Is technology the main way administrators are differentiating right now ? CM : Investor portals used to be a big thing but now most everyone has it , now many administrators are looking at workflow tools . There is a real push for the client to have a view into what everybody is doing on almost a real-time perspective . A lot of administrators will tell you a lot of their time is spent on the phone with their clients , and what is it they are asking for ? They had been asking for reporting and information that hopefully now they can get through their portal , but now they are asking where ’ s my NAV ? A lot of the work the administrators are doing is to give clients a real-time view on what their administrator is doing , such as where are
“ The biggest concern from the members is around the gatekeeper issue , around the SEC .”
we at in the process , have you processed my trades , where are we at with reconciliations , where are we at in the NAV process ?
GC : From your members so far , what are their biggest concerns ? CM : The biggest concern from the members is around the gatekeeper issue , around the SEC and what does this gatekeeper issue mean to the industry . This industry started out as an outsourced back-office to the investment managers , and it now has evolved to a shareholder servicing perspective . But what is the responsibility of the administrator in detecting fraud ? Some larger shops are avoiding taking on emerging managers because they may be the ones most at risk to fraud and the ones who give them the least amount of revenue . It ’ s a double-edged sword because sometimes those smaller shops don ’ t have as robust risk and compliance department to overlook all that . A concern is what is the role of an administrator in the regulator ’ s eyes in North America ? It ’ s pretty clear in many other jurisdictions around things such as suspicious activity reports – when do we issue one , how do we do it and what will it result in ? Some concerns in the US are that the only thing you can do is report the issue to the SEC , and it ’ s gone to that extreme for
“ A lot of the work the administrators are doing is to give clients a real-time view on what their administrator is doing .”
administrators . They are asking - should I raise a red flag ? What will the results of raising an issue be ? Probably not because I don ’ t want my client being upset that I am running to the SEC because of an item that raises concern but that perhaps is not a significant issue after all . In some of the offshore jurisdictions like the Caymans , people understand what a suspicious activity report is and they are comfortable with that . In the US , there is too much uncertainty and we ’ re worried about what happens when we pick up the phone to the SEC . I ’ m not building this to be a lobbying ground , but we need to define standards and say , ‘ this is what we feel our standards are ’, and then go to them and ask them what they think . If they don ’ t like it then we as an industry can address this or potentially push back . With an association it doesn ’ t mean one firm being the bad guy and going to them , we can do it together as a group .
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