Thomson Reuters Survey Finds Hedge Funds Require Flexible Technology to Meet Regulatory Overhaul
Thomson Reuters today announced the results of a survey on the impact of managing risk and compliance in response to new regulations. The survey, carried out during a Thomson Reuters Forum held in September, polled over 90 members of the buy-side trading community on the need for hedge fund managers to establish institutional quality compliance programs to attract investors.
Despite having risk management tools in place, the survey found that 73% of managers and 66% of investors said that their systems did not help them prevent losses during the turbulent markets of August 2011.
“The hedge fund industry is coming under increased regulatory scrutiny across the globe and controlling risk has become increasingly important for investors and managers. The results of our poll however, confirm that a number of hedge funds are still locked into legacy technology that lacks the agility to adequately respond to changing business and regulatory drivers. Thomson Reuters is working to bring solutions to market that provide our clients with all of the tools they need to scale their operations and navigate the shifting regulatory landscape,” said Gerry Buggy, global head of Enterprise Content, Thomson Reuters.
Other key findings of the poll include:
• 93% of respondents did not think the Dodd-Frank Wall Street Reform and Consumer Protection Act would prevent another financial crisis.
• With 10 representing ‘very effective’, the effectiveness of three specific parts of Dodd-Frank regulation were analyzed by respondents as follows:
o The requirement that states hedge funds with $150 million or more in assets should register with the SEC received only 4.5 out of 10
o The effectiveness of increased authority and oversight of the derivatives market received 4.4 out of 10
o The establishment of the Financial Stability and Oversight Council scored only 3.8 out of 10
Earlier this year, Thomson Reuters launched a fully integrated workflow solution that brings together the Thomson Reuters Eikon desktop and Thomson Reuters Elektron to provide hedge fund managers with the content, analytics and tools that they need to systematize their operations, provide transparency and enhance their risk management capabilities. Thomson Reuters Eikon for Hedge Funds enables fund managers to understand their positions and exposures in real-time while detailed performance reports, surveillance and alerting features allow hedge fund managers to meet investor, regulatory and corporate governance requirements.