Fundamentals of Fund Administration

This book fills a gap in the lack of books that cover the administration and operations functions related to funds. With the growth of hedge funds globally, there is more and more requirement for fund administration services, and the success of the fund administration is crucial to the success of the funds themselves in a highly competitive market. As the focus on operational risk, cost effective support and administration of trading and investment and the ability to design, develop and deliver added-value services for clients grows, there is a need for a comprehensive analysis of what happens from trade to settlement and beyond and the exact role that the fund administrator may be required to provide. The book helps those responsible for managing and supervising fund administration services by examining the decisions, actions and problems at the various stages as well as explaining the products and infrastructure that services support. The book first explains the background to the development of investment funds and the growth of hedge funds, how they have developed and their importance today. Having established the reason for the development of the mutual and hedge funds market, the book then looks at how and why the services are needed and used and how the industry is structured looking at both the main stream investment business and hedge funds, who they have relationships with and the role of the various other parties like prime brokers, clearing houses etc. The role of the various parties is explained and the interaction between securities, commodities and derivatives administration is explored. It does this by providing not only text but also a CD Rom, "Operations Clearing Settlement and Custody" that is included in the price and can be requested by purchasers of the book. It is strongly suggested that any reader new to the subject and even those wanting to refresh their memories of the basics of the settlement of transactions of investments that are used by fund managers in their portfolios should use the CD Rom before reading the book. We then look at the key. Subject of what regulatory issues affect funds and what services are needed to comply with these regulations. By way of example, the book reviews the various Directives affecting funds use of derivatives, capital adequacy requirements on banks and guidelines for private client use. From there, the book takes the reader through the process from pre-trade to trade execution, clearing, settlement and position management for a selection of different products through a clearly explained and illustrated road map. Key areas covered will include fund set up, marketing, transfer agency, recording, valuing and reporting on assets in portfolios, client services etc. The book will follow what is needed in terms of reconciliations, trade capture and verification, documentation, delivery, purchase and sales of shares/units, equalisation, margin and collateral management. Having set out the various procedures, processes and disciplines associated with supporting transactions and maintaining records, the book turns to possible problem areas. In a set of case studies, the book explores the sources, impact and possible controls to prevent and or manage such situations. This will include issues such as NAV problems, OTC confirmations, margin and collateral management, corporate actions, money laundering issues and managing the routing of trades from executing brokers to prime brokers/clearing brokers to individual funds. Finally, the book takes a look at the future developments in the fund and fund administration industry and examines the challenges ahead for operations and support teams. Various appendices provide further information and also offer a glossary of terms, websites and other sources of data plus further reading. At various stages in the book, the reader can undertake quizzes that will help to reinforce the learning element. The reader on completion of the book will fully understand the main functions, procedures and processes associated with the main products that are used by different types of funds and what the fund administration requirements are for those transactions and funds. Its concise, easy to read format explains extensive and complicated procedures with lively, easy to follow road maps. It is a comprehensive reference work with extensive glossary of terms, useful website addresses and further reading recommendations. It covers all the major stages with detailed explanations of what is required for effective completion and regulatory compliance.