Buy-Side Technology Awards 2014: Winners' Circle—Charles River Development
![stephen-butcher stephen-butcher](/sites/default/files/styles/landscape_750_463/public/import/IMG/981/280981/stephen-butcher-580x358.jpg.webp?itok=3DLoRATp)
Charles River started life as a compliance platform and now it has come full circle by winning this award. What do you think buy-side firms are looking for in a competent compliance package these days?
Stephen Butcher, Charles River Development: There are fundamentally four things that people are looking for. There are simple rule libraries that are up-to-date and complete for regulations such as the Undertakings for Collective Investment in Transferable Securities (Ucits). There are easily defined templates for basic client mandates, and in terms of more sophisticated or bespoke requirements, there is the natural language ability, or the ability to code in a language that anyone can understand. The bigger challenges going forward are around having global disclosure on a cross-asset basis, including derivatives in order to meet the European Securities Markets Authority (Esma) requirements, and that’s a big challenge. You’re seeing some of the legacy compliance providers fall by the wayside, as they can’t invest to deliver those solutions.
Compliance has been a hot topic for many years now, and there has been a barrage of regulation to cope with. Do you think we’re coming to the tail end of that, or is there still some distance to go?
Butcher: I think there’s a long way to go. There seem to be a lot of numbers that you can add to the end of these acronyms, given that we’re now on the Markets in Financial Instruments Directive II, Ucits V, and a number of others. While I think the workload might have peaked, it’s still going to be pretty continuous for the years to come.
You mentioned the Esma stipulations as an area where firms are struggling to meet the requirements, but what other areas are also proving challenging?
Butcher: You see a lot of consolidation in the industry at the moment. We’ve seen Aberdeen’s acquisition of Scottish Widows, Standard Life buying Ignis earlier in the year, both of which are in the UK of course. That provides a lot of work in terms of recoding compliance rules, and so driving down the cost of maintaining those compliance rules is a big issue for clients. What we’ve found is that there is a great shortage of compliance skills, which drives prices up. One of the things that we’ve done is provide people who can handle the implementation of the rules, rather than the interpretation of the regulations. We leave it to the client for the interpretation, and as such, we can implement on a lower cost basis, and I think that’s a trend that you’ll see across the industry. Irrespective of the vendor you have, everyone needs to reduce their costs in this area.
Finally, what can we expect from Charles River over the next 12 months?
Butcher: We’ll continue to invest. We started 20 years ago as a compliance system for Putnam, and we’ve continued to invest since then, which will be ongoing. We’ll continue to add new libraries and keep those up to date. We’ll introduce a substantial shareholder disclosure product, whereby we will provide all of the rules for that across jurisdictions, and the reporting formats. Because, again, we’re finding that even with a small to mid-sized asset manager, it can take two to three people full-time to just maintain those disclosures. In addition to that, for larger hedge funds and small pension funds, we’re also offering a compliance service that’s completely hosted. We write the rules and do the compliance, but we leave the existing trading infrastructure in place. It’s all about offering low-cost solutions.
“One of the things that we’ve done is provide people who can handle the implementation of the rules, rather than the interpretation of the regulations.” Stephen Butcher, Charles River Development
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Awards & Rankings
Sell-Side Technology Awards 2024 winner’s interview: Broadridge
In this year’s Sell-Side Technology Awards, Broadridge Financial Technology won Best outsourcing provider to the sell side thanks to its hugely successful business process outsourcing offering
Waters Rankings 2024: Best market risk solution provider (highly commended)—FactSet
Product/service: FactSet Multi Asset Class Risk Solutions
Waters Rankings 2024: Best portfolio management system provider (highly commended)—FactSet
Product/service: FactSet PM Hub
Waters Rankings 2024 winner’s interview: IPC Systems
IPC Systems won the Best cloud infrastructure provider category in this year’s Waters Rankings. Tim Carmody, CTO of IPC, discusses his firm’s recent success in the rankings
Waters Rankings 2024 winner’s interview: Vneuron
Vneuron Risk & Compliance won the best AML compliance solution provider category in this year’s Waters Rankings.
Waters Rankings 2024 winner’s interview: Cloud9
Cloud9, part of Symphony, won Best trading floor communication system provider category in this year’s Waters Rankings.
Waters Rankings 2024 winner’s interview: AI Risk
New York-based AI Risk won the Best cyber security provider category in this year’s Waters Rankings.
Waters Rankings 2024: Best performance measurement and attribution system provider—FactSet
Product/service: FactSet Performance Solutions