DTCC Connection

Nov 01, 2016 • DTCC Connection

Clarient’s Gabino Roche discusses the importance of NAV AUM functionality

Gabino Roche, Executive Director of Product at Clarient Global LLC

Gabino Roche, Executive Director of Product at Clarient Global LLC

Today’s evolving regulatory environment, and increased financial market sophistication have elevated the need for timely, accurate and extensive client and counterparty information. Investment/Asset Managers are challenged to effectively distribute client data and documents such as regulatory filings, legal authorization documents, bi-lateral agreements and financial information all while balancing their commercial, regulatory and client service deliverables and reducing operating costs.

In an effort to reduce the industry’s client data and document management burdens, DTCC in collaboration with Barclays, BNY Mellon, Credit Suisse, Goldman Sachs, JPMorgan Chase and State Street, founded Clarient Global LLC (“Clarient”). Clarient Entity Hub is an industry utility platform whereby legal entity data and documentation can be securely uploaded through a single entry point and maintained and shared between counterparties through an intuitive interface, enabling complete transparency into the process and control over content. Clarient Entity Hub’s Base Relationship Service provides a secure environment for counterparties to establish a permissioned base relationship to exchange and maintain a full spectrum of legal entity data, as well as any documents related to onboarding, KYC, AML, regulatory, credit and transactional needs. All through a comprehensive workflow with fully transparent content controls and audit trail.

Notably, the Clarient Entity Hub Base Relationship Service allows for structured, scalable distribution of Net Asset Value (NAV) and Assets Under Management (AUM) information enabling Investment Managers to easily communicate this data to their banks and broker dealers, creating a more efficient way to manage a holistic view of their clients’ data. Gabino Roche, Executive Director of Product at Clarient Global LLC, spoke with DTCC Connection to share his insights about the NAV/AUM functionality of the Clarient Entity Hub Base Relationship Service.

DC: How does the NAV/AUM functionality work with the Clarient Entity Hub Base Relationship Service?

GR: For every entity created within the platform, investment managers can upload valuations data (NAV/AUM) directly. Investment managers can also save time with the ability to do this in bulk by downloading a pre-filled template from the application that contains a list of every entity that they manage. This pre-filled template can be updated with NAV or AUM information and uploaded. Once the file is uploaded, Clarient Entity Hub will process the information and update all the applicable legal entities accordingly.

Banks and broker dealers can view NAV/AUM for every legal entity, to which they have been granted access to by their Investment Managers, through the user interface when they access the entity details, or through a report that can be downloaded daily - containing recent and historic data for every legal entity record they have access to.

DC: How are financial institutions currently distributing and maintaining NAV/AUM information?

GR: Currently, we are seeing that there is a very manual and disjointed process for exchanging NAV/AUM information between investment managers and banks and broker dealers. Most firms use inefficient and insecure methods, including email, to distribute this information. As such many find themselves dealing with multiple back and forth communications, fielding multiple requests and sending the same information numerous times to many brokers.

DC: Who benefits from being able to distribute this information through Clarient Entity Hub?

GR: Both buy and sell-side market participants benefit from the ability to distribute NAV/AUM information through the platform actually.

Investment managers are responsible for keeping the information as up-to-date as required and for providing it to all of their banks or broker dealers. Clarient Entity Hub offers a more secure and efficient solution by enabling the investment manager to upload the information securely through a single entry point and permission it out to multiple counterparties – eliminating the redundant and time consuming process of doing it each time manually.

In order to be compliant with KYC and AML regulations, banks and broker dealers need to collect and manage the most current information. The Clarient Entity Hub Base Relationship Service provides banks and broker dealers a streamlined, automated way to gather validated up-to-date information from their buy-side counterparties. Once a base relationship is established, it can be used to exchange an unlimited amount of content between parties. The ability to exchange NAV/AUM information is included with the fee for the Clarient Entity Hub Base Relationship Service.

DC: How is the NAV/AUM functionality a building block to front-to-back solution for clients to be “ready to transact”?

GR: Fund performance and financials are critical for credit line set-ups, maintenance and risk management. The Clarient Entity Hub Base Relationship Service NAV/AUM functionality is one of the first steps towards helping firms gain pre and post transaction scalability, efficiency and transparency into the exchange of information beyond the scope of KYC and regulatory requirements. Clarient is working on building a broader portfolio of features within the Clarient Entity Hub to include further synergies across broker-line set-ups and custodial arrangements.

DC: Does the Clarient Entity Hub Base Relationship Service provide any other benefits to investment managers?

GR: Clarient Entity Hub offers an array of benefits to investment managers. Benefits include transparency into fund structures, reduced bilateral coordination with counterparties, standardized document exchange (eliminating the need for multiple responses for requested content), and enhanced controls to allow only permissioned access to information. Additionally, Clarient Entity Hub accelerates the process of providing information to counterparties by leveraging validated public data during the record creation process.

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