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By Beverly Chandler, Opalesque UK:

The increasing strength of the ‘gold standard’ Ucits product and the implications of the arrival of AIFM have led to a growth in the number of fund managers seeking independent valuations of the OTC derivatives parts of their portfolios.

“The newest Ucits framework, Ucits IV, provides some scope for asset managers to use derivatives to a greater extent” says Paul Compton, head of product management, alternative investments, SunGard, in an interview with Opalesque. “New customers are using our service as part of their Ucits compliance programme.”

Compton is finding new business from asset managers and fund administrators working in both the hedge fund space and the traditional asset management world. “As an asset manager starts using derivatives, they need to understand what they are engaging in and how to modify their operational processes” says Compton.

Either the AIFM or Ucits route carries similar regulations. “With respect to valuation, the AIFM and Ucits framework are intended to be equivalent, so whichever umbrella you pick, you will face the same kind of requirements” says Compton.

SunGard’s FastVal product offers what Compton describes as ‘a horizontal service. “It works across the board for OTC derivatives whatever the underlying asset is, from straightforward to very complex products” he says.

Even with the arrival of OTC clearing in the next wave of regulatory change, fund managers valuations ......................

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