MUFG Investor Services Taps Point Nine's Middle-Office Platform to Help with Reg Reporting

The agreement—which is exclusive to MUFG, meaning that other asset servicers cannot use the platform—will allow MUFG to free up in-house resources while providing clients with greater transparency into the asset servicer’s middle-office operations, such as for regulatory reporting, reconciliations, corporate actions, settlements, affirmations and matching. Requirements in the revised Markets in Financial Instruments Directive, and US rules including Form PF have placed added emphasis on these areas.

Point Nine’s platform, Circle, was rolled out in 2007. It is a cloud-based solution using Amazon Web Services and is built using a Python architecture. Pavlos Christoforou, cofounder of Point Nine, says that his company competes with the fund administration services offered up by the other big banks, such as Northern Trust, BNY Mellon and JPMorgan. He says that one of the unique aspects of the platform is that it is not a black box, thus users can look in and monitor the whole operational setup, thus offering greater transparency for the user.

“There’s a shared vision of offering to the clients a trade-and-forget model. The idea was that the investor, the investment managers just want to make decisions and the rest of the stuff they want to be taken care of, so we started with that premise,” he says. “We proceeded by trying to fill the gaps in the post-trade processing end for these investment managers.”

He adds that this partnership will allow the vendor to increase its suite of services and venture into the pre-trade analytics realm.

“We do not yet do much on the pre-trade side—to help the investment manager with decision making—but this is why we’re excited to work with MUFG, because they want to expand the service for both fund administration, but also for [pre-trade services],” Christoforou says.

The Circle platform has processed over one billion trades thus far, he adds.

Mike McCabe, MUFG’s sales director, says that the company looked at about 10 other providers, but felt that Point Nine’s platform provided the most transparency and was easily integrated with MUFG’s in-house platform.

In the continuation of a trend that has been unfolding since the financial crisis, asset managers are increasingly looking to outsource various functions around operations, processing and reporting, McCabe says.

“If you’re looking at the core administration, middle-office services is something that our asset managers are looking more and more to us to provide. If you’re looking at our business process outsourcing—or BPO—as a standalone, it’s large asset managers that are looking to focus on investment management rather than operations, so we’re able to utilize the Point Nine platform to service the BPO clients, as well as a standalone.”

MUFG services over $100 billion in assets globally.