Fundamentals of Fund Administration Training Course

Attend this two-day intensive training course and equip yourself with:

• A clear understanding of the role and responsibilities of fund administration
• The confidence to liaise with investment managers, fund sponsors, custodians, selling agents and investors
• The latest developments in managing and controlling fund administration processes and procedures
• The knowledge of how to value and price investment funds accurately
• The expertise to identify and manage sources of risk in fund servicing
• The ability to maintain the fund's compliance with regulatory and tax rules

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Understanding Investment Funds

• Investment management
  – Objectives
  – Styles
  – Use of products and strategies
• Off-shore vs domestic funds
• Background, structures and types of funds
  – Investment companies
  – Trusts
  – Partnerships
• Regulation of funds and the implications on fund administration
• Overview of fund set up and launch
  – Offering documents
  – Applications
  – Appointments
  – Stages in the process to actual launch
• Operational risks

Roles and Responsibilities

• Defining the responsibilities of various parties in the overall administration of the fund
• Fund operations
  – Trade capture
  – Settlement
  – Reconciliation
• Fund valuation and accounting
  – Pricing
  – Valuations
  – Accounting records
  – Financials
         * Reports
         * Statutory Accounts
         * Cash Management
• Transfer Agency
  – Subscriptions
  – Redemptions
  – Fund Register
  – KYC/AML
  – Customer and investor relationships
• Managing your relationship with
  – Investment managers
  – Brokers
  – Custodians
  – Fund sponsors
  – Trustees
  – Investors
• Secretarial function
  – Director meetings
  – Investment management meetings
  – Minutes
  – Regulatory administration
  – AGM
  – Correspondence
  – Operational risks

Workshop – Role of Fund Operations

The Process Of Trade Capture, Record Keeping and Reconciliation

• Portfolio trade capture
• Clearing and settlement
• Managers records to prime broker and custodian records
• Corporate actions management
• Asset verification and control
  – Asset reconciliation
  – Securities lending and borrowing
  – Margin calls
  – Collateral
  – Cash flow

Operational Risks

Workshop – Road Map of the Valuation and Pricing of Investment Funds

• Purpose of book-keeping for portfolio transactions
  – Positions
  – Accruals
• Posting of G/L entries
• Calculation of all management fees, performance fees and any related expenses
• Calculation of accrued income - e.g. coupon income, interest on cash balances, dividends, etc.
• Computation of the value of the fund's asset
  – Identifying appropriate pricing sources
  – Valuing securities
         * Listed and unlisted securities
  – Valuing derivatives
         * On and off exchange
  – Other assets
         * Property
         * Alternative investments
  – When and which prices should be used for international funds with holdings in different time zones
  – FX rates for conversion of FX amounts
  – What procedures should be used for the Valuation of illiquid instruments?
• Daily calculation of the Net Asset Value (NAV)
• Procedures & controls
  – Reasonableness and consistency
  – Pricing policy
  – Operational risks

Workshop – Registrar and Transfer Agency Services

• Maintenance of the shareholders' register for the fund
  – KYC & AML
  – The Fund Register
  – Subscription and Redemption Road Maps
         * Issuing certificates and electronic records
         * Amendments to investor details
         * Arrangements on death of shareholder and powers of attorney
• Subscriptions and Redemptions via agents
• Reporting

Managing Regulation and Risk in Fund Servicing

• Relevance and implications of the regulatory environment
  – European directives
  – Jurisdiction regulation
• Defining risks
  – Documentation
         * Purpose of agreements
         * Prime Broker Agreements
         * Custody Agreements
         * Investment Management Agreements
         * Fund Administrations Agreements
         * Stock Lending Agreements
         * Property Management and Rental Agreements
         * Service Level Agreements
         * OTC derivatives
• Compliance
  – Assets
  – Liquidity
  – Fraud
  – Systems
  – Communications
  – Human resources
• Identifying sources of risk in fund administration
  – Valuations: price sources (including offexchange pricing), NAV calculation and timing, accuracy and completeness of published information
  – Settlement: mis-settlements/failures, handling of buy-ins and interest claims
  – Reporting: reporting period, accuracy, completeness, deadlines
  – Information: timely flow, signatories, standing instructions, client and statutory deadlines
  – Trading: excessive dealing and turnover
• Identifying risk situations in the workflow
• How can you control these risks: latest techniques and industry standards
• Managing day-to-day risk and dealing with exceptions
• Monitoring of mandates and offering documentation compliance
• Legal requirements for the risk management function

Case Study – Risk Relationships: Client/Counterparty/Bank

Divided in two teams, delegates will analyse two situations and make their report on

• What has happened
• Possible reasons
• Lessons to be learned

Compliance in Fund Administration

• Legal compliance
• How the compliance function differs from the risk management function
• Monitoring of investment policy compliance
  – Comparison to internal and external benchmarks or model portfolios
  – Over and underperformance
  – Tracking errors
  – Sensitive calculations
• Performance measurement
  – Performance fee basis and calculations
  – Equilisation
• Adhering to regulatory and client investment restrictions
• Compliance with tax and regulatory rules
• AML and KYC checks?

Wrap Up Exercise – Fund Set Up, Launch and Administration - preparing a detailed overview of what a fund sponsor needs to know about the setting up, launch and operation of a new fund

Dramatic developments in the investment management industry are placing an increasing pressure on the fund administration sector. Global competition, rapid changes in technology, the creation of web-based funds and new fund structures, and the escalating debate on whether to outsource fund administration or keep it in-house are creating a stronger expectation on the investment services industry for a wider level of professionalism and a more highly skilled workforce.

Due to high demand within the industry, IFF has specifically researched and developed this highly interactive training course designed to describe the most important administrative procedures of domestic and off-shore funds.