New feature enables users to re-reconcile month-end reconciliation using real-time transactions and cash balance changes
Electra Information Systems (Electra), an innovative provider of proven software solutions for the asset management industry, today announced the release of Electra Reconciliation Dynamic Snapshot, the newest functionality added to its award-winning reconciliation platform. Electra Reconciliation now comes equipped with a real time month-end reconciliation feature, Dynamic Snapshot. This component gives users the ability to re-reconcile a final month-end reconciliation incorporating real-time transaction and cash balance changes.
Hedge fund managers typically close out their month-end processing during the first two weeks of the month following the statement period. While reconciliation of positions and transactions may be a daily activity, month-end reconciliation is of particular importance because the correct calculation of net asset value can only occur once all information has been obtained and recorded. It is common for additional items to be reported by prime brokers and custodians after month-end and the Dynamic Snapshot features built-in logic to identify these back-dated transactions and apply them to the previous period’s reconciliation.
“The buy-side is faced with many operational challenges as margins continue to be squeezed yet regulatory and reporting guidelines leave zero room for error,” said Todd Sloan, Senior Vice President at Electra. “Month end re-processing is a tedious task when managers document variances in external spreadsheets using complex date logic. Electra Reconciliation and its Dynamic Snapshot functionality simplifies the process by allowing for the regeneration of month-end cash reconciliation at any time, taking into account all information obtained up until the time that reconciliation is re-run.”
Due to items such as dividends and interest accruals, which may apply to a previous period, it is important that managers are able to back-date them in their accounting system. This new functionality supports compliance and audit requirements, as the manager would need to detail the back-dated transactions and show how they affect the month-end reconciliation for the previous period. With the new functionality, late-reported items can be automatically integrated into the reconciliation record and net asset value calculations can be accurately reflected, both in client statements and in the manager reconciliation.
“Hedge funds, like all players in the financial service space, need to evolve and adapt to the ever-changing economic environment,” said Ian Danic, Executive Director at Electra. “Faced with strict mandates from regulators, and even stricter demands from investors, hedge funds are turning to automated reconciliation systems as a way to improve their operations, mitigate risk and reduce costs. We are confident that our comprehensive portfolio of solutions, which is now further enhanced with the addition of Dynamic Snapshot, will empower hedge funds and other buy-side constituents to conquer their back office challenges, which are often a result of legacy or DIY systems.”