Part two: Tackling the challenges
Resolving for the above, whether in isolation or combination, presents logistical, financial and timeframe challenges. It perhaps gives pause for thought on holistic solutions to all regulatory reporting – of which AIFMD reporting may be a part. Here are some key challenges and considerations fund managers should have front of mind when considering enhancements to their reporting frameworks:
- Gathering and organisation of data
This includes both internal and external sources of data, and poses a significant challenge for companies to ensure vast amounts of data required from relevant sources is gathered efficiently, without errors and in a reportable format. Standardisation and consistency are, therefore, imperative qualities to ensure that data can be processed efficiently.
- Interpreting, processing and presenting in reports
Firms must also be aligned internally as to how they interpret, process and present their data. This can be especially complicated with the tight deadlines regularly demanded by various regulators. If data and people responsible are located in different offices, this can add to the complexity. Firms should therefore consider where any overlap exists between reporting regimes and the teams that service that obligation. Duplication and repetition can be minimised and the usefulness a single data set can be maximised.
- Reporting mechanisms
All reports must be pre-validated and prepared in XML format. Each EEA jurisdictions has idiosyncratic validation tests making it almost impossible to comply across the board without expert assistance. Submission is made much more complex due to each EEA regulator operating their own regulatory reporting system – no two of which are the same. Partnering with the right software provider should solve the former, but the latter is not possible to resolve without input from expert personnel.
Read part three of our ‘Navigating the Annex IV reporting maze’ series or reach out to Michael Chambers for more information.