CACEIS is offering services designed to simplify the process of complying with the European Securities and Markets Authoritys (ESMA) guidelines for UCITS management companies. The guidelines came into force on Feb. 18 2013, while existing funds will have one year to comply with the new requirements.
To fulfill ESMA’s new collateral requirements, CACEIS provides daily valuations on OTC derivatives, securities on lend and assets pledged as collateral, also making margin call calculations. CACEIS also monitors compliance with the new risk diversification ratios, both by issuer and by counterparty. For OTC derivatives, CACEIS’s new service takes into account the forthcoming regulatory measures of the European Market Infrastructure Regulation (EMIR), which require initial then variation margin call calculations.
As for cash collateral, CACEIS segregates, in the fund’s accounts, the securities originating from management activities that are eligible to lend, and those originating from the reinvestment of collateral. The latter, under the new guidelines, can no longer be reused. CACEIS’s trading room also offers collateral reinvestment and transformation services that comply with ESMA’s new requirements.
(JDC)