Do You Know Your Customers?
New Anti-Money Laundering Rules in UK Coming in December

Investment firms, including hedge funds, will be required to beef up customer due diligence when the UK’s new anti-money laundering rules take effect December 15, 2007. The new rules in the UK are part of an international effort to curb illegal money laundering, and they are designed to comply with the Third Money Laundering Directive adopted by the European Union.

The new rules focus on making sure investment companies know the true identity of their customers, including the beneficial owner of each customer. In addition, the rules require investment firms to keep complete and accurate records, monitor the business relationship with the customer, and train staff so they know the regulations.

These new rules apply to most financial firms as well as to the professional firms that serve them. At Swiss Financial Services, we’re prepared to help hedge fund investment managers comply with these new regulations. 

Stop Chasing Prices
Exclusive PCS Delivers Independent Fund-of-Funds Valuation

The value of a FoF portfolio traditionally has only been determined on the basis of the Final Administrator Price of the underlying funds. This practice makes the portfolio valuation process of the FoF dependent upon waiting until the last underlying fund investment reports its NAV. This approach makes it difficult to distribute FoF shareholder statements in a reliable and timely fashion to its investors, resulting in very unsatisfied investors. At Swiss Financial Services, we believe there is a need for a new approach to produce accurate FoF NAVs in a timely manner to fully satisfy investor demands while following sound accounting principles.

With this goal in mind, Swiss Financial Services has developed, in cooperation with its customers, a valuation process supported by our exclusive Price Collection System (PCS). The main objective of our PCS initiative is to close the books and distribute the NAVs of our FoF mandates on a pre-defined, reliable schedule based on an independently priced portfolio.  Our approach includes:

• A dedicated team to independently collect fund investment prices
• Strict pricing policies and procedures
• Automated checks and balances for quality assurance

Our PCS approach enables us to close the books of our FoF mandates in a shorter period of time and on a dependable schedule based on the best available prices at the pre-defined, cut-off date in conjunction with tight, quality reviews.

SFS Joins Sponsorship of Asian Hedge Fund Awards Program

As part of its ongoing commitment to support excellence in the industry, Swiss Financial Services participated in the sponsorship of The 2007 Asian Masters of Hedge Awards organized by Eurekahedge.

The winners were recognized at the Asian Masters of Hedge Awards Ceremony and dinner held at The Ritz Carlton Hotel in Singapore. Hedge fund managers, service providers and investors attended the event.

Nineteen awards were presented. Swiss Financial Services sponsored the Best Asian Fund of Funds award, which was given to Swiss-Asia Genghis Hedge Fund. In addition to honoring industry members, the event raised US$30,000 for charity.

SFS opened an office in Singapore in 2006 to serve the growing number of clients in Asia.

SFS Growth on Track

Swiss Financial Services has been steadily growing its client base and now is responsible for the administration of $42 billion in assets around the globe. SFS has a total of five staffed offices worldwide and is represented in Europe, the United States, the Caribbean and Asia.

SFS is a boutique firm by design, managing its own growth to ensure that each client receives customized service. With low employee turnover and an impressive staff-to-client ratio, we are able to understand each client’s needs and develop personal, partner-oriented relationships with the ability to build these relationships long-term.

During the past 12 months, SFS has opened an office in Singapore and added employees worldwide to accommodate the solid growth in business. Founded in 1984 and employee-owned, SFS is based in Switzerland. In addition to Zurich, Switzerland, SFS has offices in Naperville, IL, USA;  Nassau, the Bahamas; Waterford, Ireland; and Singapore.

Mergers of Hedge Fund Administrators Continue
SFS Committed to Remaining Independent

A 2007 report from the Aite Group, LLC, a Boston-based research and consulting firm for the financial services industry,  says more consolidation of hedge fund administrators is likely. The industry already has experienced significant merger mania with large banks buying hedge fund administrators. The report, called “Game On: Hedge Fund Administration,”  also takes note of another new trend that’s developing—more administrators providing core operational services for hedge funds.

“Administrators are progressively making headway into the core operations of investment firms—particularly hedge fund firms that wish to focus on investment returns versus operational excellence,” the report notes. “The business is far more complex than traditional fund administration services and poses greater risk, but offers significantly higher margins.”

At SFS, we believe there is substantial value in being an independent, boutique firm. By design, we focus completely on providing key back office services of accounting and administration to a limited number of clients. That’s been our mission since opening our doors in 1984, and we can assure our clients that we’ll remain independent.

© Swiss Financial Services 2007