Blog Entries from 05/2010
This week, the Securities and Exchange Commission (SEC) voted to propose rules that would require exchanges and broker-dealers who execute high frequency trades to provide trade information to a central repository in real time or near real time as a means for the SEC to better supervise trading activity. This proposal appears to be a result of the Dow Jones Industrial Average’s nearly 1,000 point drop on May 6 and a means for the SEC to better oversee the financial markets.
To many, high frequency trading remains a misunderstood and often unfairly-attacked subset of the investment industry. With this in mind, we’ve decided to take a closer look at what high frequency trading is and what the future may hold for this practice.
Here at Eze Castle we spend a lot of time helping new funds launch or expand their operations around the world. We’ve done this for a long time so we have a set of best practices that we follow and introduce with our clients. We’ve decided to create an eBook outlining all the best practices for launching a hedge fund with regards to your technology and operational needs. But first, we’re going to blog about it in four parts starting with today so you can get a sense of how we can help you.
The benefits to launching a hedge fund are innumerable; you make the decisions that lead to success and you directly reap the personal and financial rewards of your hard work. As you set out to launch your own fund, however, you might feel that choosing the right supporting tools – specifically technology solutions – is a daunting task.
Technology plays a vital part in the financial services industry today. If you come from an established investment management firm, you likely had an IT department to make decisions about your technology needs. On your own, you don’t have that resource. However you also don't have the constraint of having to win approval for technology choices you know will improve your business and benefit your clients. By launching your own hedge fund, you gain control over every choice regarding technology outsourcing, purchases, maintenance and upgrades.
Categorized under: Launching A Hedge Fund
Last week at the Cavendish Hotel in London we hosted a seminar looking at developments in the hedge fund market with a close examination of impending regulation. This is a particularly timely topic as the EU governments continue to discuss backing hedge fund rules. Our moderator, Dominic Hobson of Global Custodian, was joined by panelists Bob Guilbert of Eze Castle Integration, Jerome Lussan of Laven Partners and Gus Black of Dechert.
Our esteemed panel provided a lively discussion of the impact of new regulations, the FSA’s raids and crackdowns on insider dealings and investors' due diligence processes. However, there was only so much that could be covered in an hour, so we’ve pulled together resources to help provide clarity on the regulatory landscape in the United Kingdom.
Hot sites and Remote Sites are two commonly confused terms for a fund looking at Disaster Recovery solutions. Both are remote sites to serve as a secondary disaster recovery site --- but the differences between the two are crucial to understand when weighing your decision. A hot site is a remote physical location where you can maintain copies of all of your critical systems, such as trading applications, data, and documents. A remote site provides a secondary instance or replica of your IT environment—without physical desks and office infrastructure—that you and your firm’s employees can securely access and use remotely, through standard Internet connections, from anywhere. How do you choose which site is best for your fund?
Begin by evaluating your fund’s needs: when would you most likely need to access the site? How many employees do you have? Is it cost-effective to book a seat at a hot site for each employee? In the event of a disaster, does each employee have remote locations from which they can work? Is it crucial for everyone to work side-by-side?
Categorized under: Disaster Recovery
Last week we looked at the differences between Disaster Recovery and Business Continuity Planning. This week we’re going to go deeper into disaster recovery planning and considerations for hedge funds and investment management firms.
For many hedge funds, disaster recovery remains an Achilles’ heel – an expensive and sometimes distracting proposition. But planning for and taking the right steps to develop a comprehensive IT disaster recovery plan that is customized for your firm will allow you to be best prepared for unexpected events.
What factors should you take into consideration when establishing your disaster recovery plan? Here are a few to get you started:
Capital Costs: What is the right economic choice? When it comes to disaster recovery for hedge funds, specific requirements for each firm will differ. Your firm’s preparations for disaster recovery should reflect your underlying business requirements, including strategy (long-only, high frequency, etc.) which will directly shape your budget decisions.
Hardware, software and other necessary disaster recovery requisites can be costly for hedge funds, particularly small firms looking for minimal capital expenditures. In some cases, firms may select outsourcing disaster recovery to a qualified managed service provider. Firms should conduct a thorough evaluation to determine whether it makes sense to outsource disaster recovery or to manage disaster recovery in-house.
According to the Privacy Rights Clearinghouse, more than 100 million data records of U.S. residents have been exposed due to security breaches in the last five (5) years. In order for an investment management firm or hedge fund to correctly control and protect its data, you must first have a thorough understanding of what exactly you are storing in both print and electronic documents. Secondly, you must have data loss prevention technology in place to protect the information.
Data Mapping is one method that will help you understand what information is being stored within your infrastructure. Data Mapping involves searching your entire organization to determine what personal information is stored and where. Once the data is found, maintaining your organization’s data map is very important. This will help ensure that the personal information remains secure.
After you understand where your data resides, you will need the proper technology in place to protect it. Data loss prevention (DLP) technology is often one piece of the puzzle. DLP technology, such as GTB Technology’s eDiscovery product, can be used to monitor and protect data at rest, in motion and on the endpoints through deep content inspection and the constant monitoring of transactions occurring across the network
Categorized under: Trends We're Seeing
In response to the implementation of MA 201 CMR 17 on March 1, 2010, Eze Castle Integration held a recent webinar to assist investment firms in developing and maintaining a thorough Privacy Compliance system. Among the essential practices in preventing and properly addressing security breaches, our speakers addressed Data Mapping, The Privacy Compliance Life Cycle, and Security Requirements and Solutions. But before getting into the technology safeguards, we look at the legal requirements of 201 CMR 17.
The creation of Chapters 93H & 93I work to direct OCABR in promulgating regulations, stimulating breach notifications and the destruction of documents containing personal information (PI). According to OCABR, the vast majority of breaches occur with data in transit and on PDAs. Among those breaches, 97% were not encrypted data.
Categorized under: Business Continuity Planning