In our Portfolio Management System, you’re able to incorporate Compliance Rules into your portfolio. These rules show when risk limits, investment rules and regulations have been breached.
These rules are user-defined.
- You can decide which rules to include, and how they are defined.
These can be applied at group, individual position or transaction levels.
- So, you can choose which values of a group are compared (e.g. Market Exposure (Base), or Market Exposure, etc.).
But APM can also be pre-loaded with suggested rules, based on your requirements.
Pre- and Post-Trade
These Compliance Rules can be applied to pre-trade levels, post-trade or both.
Once you have entered an order, APM creates a prospective portfolio and compares these positions against your existing Compliance Rules.
Orders can be submitted as single or block orders.
- For block orders, if one order within this breaks a rule, then the whole block order will fail.
An alert appears when a Rule is broken. You can then do one of the following:
- Amend the order
- Cancel and re-start
- Submit the order anyway (depending on your entitlement requirements – further explanation in the ‘Levels’ section below).
You can also do an analysis of this breach.
This compliance applies to existing positions held within the fund.
Positions are continually monitored against the Compliance Rules that you have set, as prices change.
- If you are connected to real-time market data, APM will use these live prices when checking for breaks.
Historical views of breaks are also possible.
To look back on the Compliance Check Status for a given order, visit that order’s Audit History.
Our Compliance Rules have different levels – soft, medium and hard.
These mean that, when a Compliance Rule is broken, only those users with certain entitlements may continue to submit the order – with the entitlement level depending on how ‘soft’ or ‘hard’ the rule is.
These levels are:
- Soft – levels 3, 4 or 5 entitlements required to override.
- Medium – levels 4 or 5 required.
- Hard – level 5 required.
A red value is shown on screen when a position exceeds a threshold value.
An amber value is shown when a position exceeds a warning value.
If rules are breached, either by trading or a price movement, then a message is sent detailing this break. This can also be sent as an email to a distribution list.
Setting these up in APM
To get started with Compliance Rules, simply:
- Go to Maintenance
- Select ‘Compliance Rule Setup’
- Fill in the details as you require