This check is to test the setup of securities and companies for AIFMD clients.
Please run the below governance reports and follow the below table to pick out any errors for correction.
| Report | Purpose |
|---|---|
| Open end funds - possible errors | AIFMD sub-asset types need to properly identify open end funds. This report shows any instruments currently being identified as being open end funds, but which, depending on certain criteria, possibly may not be. It does not necessarily follow that everything in the report must not an open-ended fund or that it needs amended. It is meant to flag anything that may not be an open-ended fund for review. Review the instrument name and ensure that the funds are in fact open-ended. E.g. we wouldn’t expect investment trusts, property funds etc. Ensure also that anything NOT marked as open ended is appropriate also. |
| Issuers that are GOPS | This report sets out all the Companies which have been identified as being Government Issuers. Review the report and confirm that all the Issuers are in fact government issuers. Flag anything that is incorrect for amendment. These issuers will then need to be updated within the Company master. The field within the company master that needs updated is: |
| Possible Gov Issuers | AIFMD sub-asset types need to properly identify government issuers. This report will show you anything that COULD BE a government issuer. It does not necessarily follow that anything in the report must be a GOPS or needs amended. It will have some government issuers in it, and some companies not set as being GOPS. It is meant to flag anything that could be a GOPs for review. Review the company names and flag anything that needs amended. Again, these will need to be updated within the company master. The “COMPANY.COMPANY IS GAPS” field should only be marked as True for those that are government issuers. Check whether anything marked as False needs corrected to True. You will need to check whether anything marked as True needs to be corrected to False. |
| Possible money market funds | AIFMD sub-asset types need to properly identify money market funds This Report shows any instruments identified as being potential money market funds. It does not mean that everything in the report is set up as a money market fund, or that it should be set up as such. It is meant to flag anything that could be an MMF. Review the instrument name and ensure that, if any instruments are in fact Money Market Funds, that the CUSTOM ATTRIBUTE.AIFMD SUB-TYPE is populated as Investments in CIU not operated/managed by the AIFM - Money Market Funds and Cash management CIU. Flag any issues for resolution. Conversely, check that anything that is not marked as Investments in CIU not operated/managed by the AIFM - Money Market Funds and Cash management CIU is in fact not an MMF. |
| Possible ETFs | AIFMD sub-asset types need to properly identify exchange traded funds. It will flag anything in the system that may be an ETF. It will pick up some securities set as being ETF and some that are not. It is set up to pick out anything that could be an ETF rather than showing what is actually set in FundWare as an ETF. Please check carefully by asset classification. E.g. anything that is a debt or an equity will not be an ETF – unless this has been set up incorrectly. If there are any funds that have been set-up incorrectly, then these will need to be reset up within the system, so they are correctly reflected in the system. This will be the case for e.g. some of ETFS Securities’ issued securities as many of these are actually collateralised debt instruments and should be treated as a debt and not an ETF. Review the instrument name and ensure that the “Is ETF” field is only marked as Yes for all holdings that are actually ETFs. For ETF = False, check also that this is appropriate. |
| AIFMD - Central Counterparties - companies set as being CCPs | For AIFMD, you need to identify where your counterparties are central counterparties. Review this report and ensure that only CCPs are marked as being so. OTC counterparties (Northern Trust, State Street etc.) should not be marked as being CCPs. Also confirm that the BIC and LEI codes are valid or blank for CCPs, as invalids will cause validation errors. |
| AIFMD - Instrument Locations to AIFMD Regions Mapping | The AIFMD Report requires you to analyse holdings by AIFMD Region. This Report shows each country set up in FundWare and its mapping to the relevant AIFMD Region. Run the report and ensure that there are no blanks or errors. ESMA guidance on country and region mapping is available here: https://www.esma.europa.eu/sites/default/files/library/2015/11/2013-1358_aifmd_reporting_it_technical_guidance-revision4.zip Please review and ensure that all countries are being assigned to the correct AIFMD region, otherwise this can cause issues with the disclosures made within an AIF report. |
| Debt with maturity in past | This report will flag any debt securities with an incorrect maturity date. If the date is in the past, then the debt security will not be included as part of your holdings for the reporting. Run the report and check that dates are genuine – e.g. 2016 instead of 1916. Raise any issues for resolution. |
You may need to make some changes. Please save a copy of each governance report and highlight anything that doesn’t look right, making changes in the security and company masters as required and requesting your manager to approve.