Fund Custody and Administration

Fund Custody and Administration

1st Edition - July 11, 2016

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  • Author: David Loader
  • eBook ISBN: 9780128499016
  • Hardcover ISBN: 9780128044001

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Fund Custody and Administration provides an overall perspective of investment funds without limiting its analysis to specific fund structures, as other books do. Since governance and oversight of investment funds are now major regulatory requirements, administrators and custodians must place greater emphasis on the custody and safekeeping of fund assets, on the independent and robust valuation of the assets, and on collateral management. By focusing on both the asset transactions made by the investment manager for the portfolio and on the transactions in the shares or units of the fund itself, it gives readers insights about the essential elements of investment fund management and administration, regardless of their geographical backgrounds.

Key Features

  • Explores the key stages in the investment process, from setting up a fund through its launch and operation
  • Explains the roles of participants as well as the ways regulation affects the fund and its operation
  • Describes the work flow associated with custody and administration procedures and processes
  • Defines the role of compliance and risk management in the context of the fund and also how compliance requirements apply to custodians and administrators


Graduate students and professionals worldwide studying or working in financial institutions and services

Table of Contents

    • About the Author
    • Preface
    • Introduction—What Is Fund Administration and Custody
    • Part 1: Introduction to Investment
      • Abstract
      • Investment environment
      • Islamic investment funds
      • Unregulated funds
      • Investment strategies
      • Using derivatives
      • Portfolio management
      • Investment performance
      • Risk versus reward
      • Performance ratios
      • Investment management fees and costs
      • Summary
    • Part 2: Regulation and Fund Structures
      • Abstract
      • Overview of regulation
      • Regulation and directives
      • AIFMD and AIFMs
      • Retail funds
      • UCITS directive
      • Money laundering
      • Principles and recommendations
      • Fund of funds
      • Multimanager funds
      • Other structures
      • Retail funds
      • Hedge funds
      • Retail/mutual fund custodian
      • Fund administration
      • Prime broker/brokers
      • Documentation and agreements
      • Summary
    • Part 3: The Day-to-Day Operation of a Fund
      • Abstract
      • Introduction
      • Process workflow
      • Investment capital
      • Investment process
      • Asset servicing
      • Fund operations
      • Valuation and accounting
      • On-exchange pricing and valuation issues
      • Valuation checklist
      • Income and expense
      • Margin and collateral
      • Distributions
      • Performance fee calculation
      • Transfer agency
      • Distributions
      • Custody and depositary
      • Global custody
      • Securities lending and borrowing
      • Characteristics of securities lending
      • Uses of securities lending
      • Securities lending precautions and controls
      • Borrower default
      • Day-light exposure
      • Settlement delays
      • Market inefficiencies
      • Collateral
      • Securities
      • Certificates of deposit
      • Government bonds
      • Equities
      • Irrevocable letters of credit (L/Cs)
      • Securities lending agreements
      • Role of the prime brokers/global custodians
      • Nondiscretionary program
      • Discretionary (or managed) program
      • Operating the pool
      • Benefits and entitlements
      • Lenders’ rights
      • Manufactured dividends
      • Role of the custodian or intermediary
      • Importance of accuracy and timeliness
      • Actions required
      • Implications for collateral
      • Repurchase agreement (repo)
      • Securities lending relationship structure
      • Summary
    • Part 4: Risk
      • Abstract
      • Risks faced by a fund and how the administrator can assist the fund to manage the risks
      • Operational risk
      • Types of risk
      • Self-assessment and measuring risk
      • Risk scenario analysis
      • Conflict resolution exercise
      • Risk of fraud in finance
      • Risk terminology
      • Glossary of risk terminology
      • Summary
    • Part 5: Introduction to derivatives
      • Abstract
      • Introduction
      • Exchange traded futures and options
      • OTC derivatives
      • Swaps
      • Appendix A—useful reference websites
      • Appendix B—OCC STANS
      • Appendix C—Dependence and Concentration
      • Appendix D—Suggested Further Reading
    • Part 6: Summary—Fund Administration Notes
      • Abstract
      • Exercise Answer
    • Part 7: The Future of Fund Custody and Administration
      • Abstract
    • Appendix 1: The Investment Association Categorization of Funds
    • Appendix 2: Source-Investment Association
    • Appendix 3: Glossary of Risk Terminology
    • Appendix 4: Organization of the SESC
    • Appendix 5: Reporting Annex IV Transparency Information Under the Alternative Investment Fund Managers Directive
    • Appendix 6: Questions and Answers: Application of the AIFMD
    • Appendix 7: China Securities Regulatory Commission (CSRC)
    • Appendix 8: October 2015—Top 10 Performing Funds
    • Appendix 9: Global OTC Derivatives Market-Source BIS
    • Appendix 10: Global OTC Derivatives Market-Source BIS
    • Appendix 11
    • Glossary of Terms
    • Useful Websites and Links
    • Index

Product details

  • No. of pages: 340
  • Language: English
  • Copyright: © Academic Press 2016
  • Published: July 11, 2016
  • Imprint: Academic Press
  • eBook ISBN: 9780128499016
  • Hardcover ISBN: 9780128044001

About the Author

David Loader

David Loader is the cofounder of DSC Portfolios Ltd., which specializes in global training and consultancy services for the financial industry. He has worked in the debt, equity, and derivatives markets, and his expertise in back-office dynamics is unparalleled. He has written widely on operations management, derivatives, fund administration, and operational risk.

Affiliations and Expertise

Director, DSC Portfolio Ltd. and Loader Associates Ltd.

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