Regulatory Compliance Association Reviews

The Shadow Accounting Journey: How to Evolve Your Operating Model to Scale for the Future

Practice Edge 02

Date: October 6, 2015
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

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It is common for fund managers to engage third-party administrators to maintain their books and perform a host of back- and middle-office services. But many also elect to maintain in-house operations and technology to oversee or “shadow” their outside administrators. Shadowing enables a manager to validate an administrator’s output. A full shadowing model can become very duplicative and costly, resulting in limiting the firm’s ability to grow, offer new products, implement new strategies and enter new markets. Some fund managers are now redefining their shadow accounting models, moving from full shadowing toward a more targeted approach, or a “partial shadowing” model. What is the optimal level of shadowing a fund manager should perform to maintain adequate level of operational oversight and meet investor demands, while controlling cost, has become a hot topic in the asset management industry.

This Practice Readiness Series will cover the latest shadow accounting trends in the asset management industry, the drivers of partial shadowing, what functions must be shadowed in-house and what don’t require shadowing, and how managers and administrators should approach the transition from a full to a partial shadowing model including:

Students will master the following at the conclusion of this session:

  • Recognize industry trends as it pertains to shadowing activities of third party service providers
  • Identify the different models used in the industry
  • List the main considerations when implementing a shadow model with a fund administrator & impact on operating model, including oversight, governance & entity providing the shadow function (in-house vs external)
  • Comprehend the impact on systems, technology & data including confidentiality, integrity & availability

Session Chairman:

Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
Chairman, Regulatory Compliance Association

Senior Fellow from Practice:

Koma Gandy Fischbein, Senior Manager, Asset Management Performance Improvement Group, Ernst & Young

Guest Lecturers:

Samer Ojjeh, Principal, Financial Services, Asset Management, Ernst & Young
Joseph Deitzer, Executive Director, Asset Management Advisory, Ernst & Young
Christopher Miliffe, Senior Manager, Data & Analytics, Ernst & Young

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