Liquidity Monitoring and UCITS Limits with MIG21®

Princeton - 7 February 2011

Princeton Financial® Systems’ Investment Compliance Solution supports Methods for Retail and Institutional Funds

Princeton Financial® Systems’ (PFS) MIG21 facilitates the implementation of two major UCITS IV requirements, as specified in Commission Directive 2010/43/EU of 1 July 2010, Chapter VI. The first requirement is the development of a liquidity management process in order to monitor liquidity risks. The second requirement is the establishment of a limit system to monitor the fund-specific risk policy. The module "liquidity monitoring" for MIG21 provides an easy-to-implement solution in both cases as MIG21 contains all holdings and security master data required for the liquidity check.

To comply with all regulatory requirements, MIG21 offers numerous functions and reports in a fully auditable environment. For example, Princeton Financial developed a ratio on the basis of "CESR’s Guidelines on a common definition of European money market funds" named WALiq (Weighted Average Liquidity). MIG21 can display the development of the Weighted Average Liquidity over time, revealing trends before they become problems. A fund overview graphically displays the level of liquidity according to various calculation methods. MIG21 uses its familiar traffic-light system to show liquidity information at the asset level. Problematic funds can be easily identified and then examined in more detail by the user.