Olmstead Blog

SEC Modernization Update: N-PORT & Liquidity Risk Management

Posted by Stephen Alepa

Since the original announcement in October 2016, there have been multiple releases updating changes to the dates for compliance as well additional clarifications regarding considerations for the implementation of N-PORT and the Liquidity Risk Management Program. Over the past year, Olmstead Associates has been working closely with our clients to fully understand, plan for, and implement support models for our clients’ compliance.

Liquidity Management programs require a tight integrated framework across portfolio managers, compliance, risk, and fund treasurers. It often is further complicated should a fund sponsor utilize sub-advisors. Possibly because components of the Liquidity Risk Management program are still pending, most investment management companies have not yet fully defined their end-to-end operating models and the overall program that will need to be adopted by the firm.

As N-PORT requirements are effective June 1, 2018, most investment management companies are leveraging their service providers for much of the initial work and planning. Investment management companies still need to define their target operating models and the appropriate oversight to ensure governance while leveraging the controls implemented by the providers. It is essential that the oversight processes within the management company be effective and highly efficient. Olmstead does find that as the providers are still finalizing their technology platforms and determining how their clients will be able to interact with the data, it leaves clients still in flux as it relates to designing their end state operating model.

Olmstead has been working with our clients to design and implement operating models, policy documentation, integrated workflows and vendor oversight. Clients are finding value in having an independent program management and governance adviser who coordinates key deliverables across investment management, compliance, risk, and treasurer’s office.

Access the latest SEC Moderization timeline

How Olmstead is supporting our clients with N-PORT and Liquidity Risk Management Program:

Program Management: Olmstead is managing cross-organizational project plans and is providing structure to our clients' liquidity management program governance.

Functional Responsibility Matrix: We are guiding our clients by defining and documenting respective roles, responsibilities, and controls across all departments within the investment management firm.

Operating Model Alignment: Olmstead is documenting the end-to-end operating model including; workflows, timelines, and points of integration across both the investment management company and service provider.

Testing and Implementation: Supporting our clients and service providers with the analysis of provider outputs to validate provider coverage and completeness in regards to both N-PORT filings and liquidity classifications.

Oversight ModelOlmstead is facilitating and designing cost-efficient oversight models ensuring accurate regulatory reporting by leveraging technology and automated controls. 

Policy Documentation: Advising our clients with their Liquidity Risk Management Program structure and the documentation for board approval.

For more information on how Olmstead is supporting our clients with regulatory compliance planning, please contact:

Stephen Alepa




Tags: Investment Operations

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