TS Imagine and AIMA recently gathered a group of 30 Asia-based hedge fund executives at The Hong Kong Club for a discussion between Sherif Elmazi, CFO and Co-COO of Oasis Management Company, and Sim Johal, Head of APAC for TS Imagine. TS Imagine’s Stephanie Cheung moderated the discussion which focused on how COOs can unify compliance and risk to prepare for a resilient financial future.

The group discussed some of the biggest challenges facing hedge funds operating in Asia, including ever-changing nuances within different Asian markets and the need to comply with sudden and unexpected regulatory changes – as we have seen with short selling rules across Asia.

The following are highlights of the discussion:

Integrated processes ease the workflows of Asia-based investors

Aspects of Asian market structure including fragmentation and continuous regulatory shifts make compliance and financial risk management an ever-evolving, operational challenge. Similarly, the ability to pursue alpha across different regions and asset classes means that Asian investors must always be prepared for sudden changes. Amid the backdrop of fragmentation, hedge funds need a single, comprehensive solution.

Continuous updates via SaaS architecture can greatly reduce compliance risk

Even the most well-intended hedge funds can face fines and bans if they do not comply with local regulations. To ensure compliance across geographies and asset classes, hedge fund employees need to be aware of the latest regulatory updates and quickly trained to comply. Having a continually updated technology platform with over 60,000 embedded rules can help efficiently prepare and educate hedge fund employees.

Data is the driving force to all functions, but it must be accurate, timely and complete

Open architecture continues to grow in importance, and data management plays a key role. Hedge funds that own their data and embed their own code have more flexibility to manage compliance and risk.     

Technology should reduce operational risk

Pre-trade requirements have increased in importance over the past 10 years, and they are now akin to post-trade requirements. Technology is the only way to sustainably keep up with this, and manual solutions increase risk. Similarly, when compliance and risk are siloed, hedge funds introduce an additional vector of risk due to inconsistent data and possible failures in straight through processing. Closed-end systems also add risk due to their inflexibility.

Conclusion

Operating across countries is a unique challenge for Asia-based investors. Flexible technology designed to streamline compliance and risk workflows allows Asia-based investors to make the pursuit of alpha their primary focus. Amid expected continued volatility, having robust risk and compliance tools within a single platform can prepare Asia-based investors for continued uncertainty.    

 

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