The client
A prestigious global asset manager with over £600 billion in assets under management (AUM) which has offices in London, New York, Sydney and Tokyo. Its core focus is managing pension assets across multiple asset classes and strategies. Their client base consists of pension funds, corporates, insurers, sovereign wealth funds and individuals.
The work
We reviewed the client’s Pensions’ Protection Fund (PPF) Asset Valuation Client Reporting process to assess compliance with relevant legislation and regulations, notably ‘The Pensions Act 2004’ and ‘The PPF Guidance and Regulations – Guidance for Bespoke Stress Calculations for Assessing Investment Risk’.
Our client is not directly subject to the above legislation and regulations but, because some of its own clients are, our client prepares relevant investment portfolio reports to assist them with meeting their legal and regulatory reporting obligations.
How we helped
Our experienced specialists initially completed the baseline assessment during phase 1 that entailed testing a limited number of portfolios across a limited asset class coverage. This work required the mapping of legal and regulatory requirements to the valuation reporting templates and performing relevant recalculations and reconciliations.
The scope was then expanded in phase 2 to testing a larger sample of portfolios covering a wider range of asset classes and also performing a front to back review of the whole PPF levy reporting process.
Value added
Our industry knowledge and expertise enabled us to share insights about industry best practice relating to the more complex and subjective asset classification issues.
We also highlighted the significant operational process challenges that required remediation and provided recommendations for enhanced operational efficiency and effectiveness.
Furthermore, our review of the front to back processes for PPF levy reporting highlighted weaknesses around data quality that impacted other users and reporting streams in the organisation relying on the same source data used for PPF levy reporting such as the Solvency II reporting stream.