QFR Moves to Hedge Fund Hotel SEC Warns Over
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ISSUE 27 MARCH 2016 THE DEFINITIVE GUIDE TO HEDGE FUND TECHNOLOGY SEC WARNS OVER CYBER-ATTACK REPORTING Regulator fires shot at firms during annual conference NEWS 05 IN SYMPHONY Symphony CEO David GRATICULE TO END FORTRESS INFRASTRUCTURE ARRANGEMENT Gurle outlines his 06 Macro firm to spin out of platform in May NEWS ambition AXIOMA TO ACQUIRE CONCEPTONE REPORTING UNIT Firm to take on risk and regulatory offering NEWS 08 COMPANY PROFILE 20 WHAT CONCENTRATION RISKS DO CTOS FACE, AND HOW SHOULD THEY RESPOND? VISIT WWW.HFMTECHNOLOGY.COM FOR MORE TECHNOLOGY UPDATES CONTENTS London Thavies Inn House 3-4 Holborn Circus London, EC1N 2HA T+44 (0)20 7832 6500 F +44 (0)20 7832 6501 New York 200 Park Avenue South Suite 1603 New York, NY 10003 T +1 646 891 2110 EDITORIAL TOO MUCH CONCENTRATION Head of content, HFMTechnology Alex Cardno Alex Cardno +1 646-891-2117 [email protected] Reporter Jasmin Leitner Concentration risk appears to have taken a back seat to cyber-security in the hedge fund technology +44 (0) 20 7832 6657 [email protected] priority list but that doesn’t mean it is any less of a threat to fi rms. Head of content Indeed, CTOs who spoke to HFMTechnology this month were all too aware of the risks that exist Paul McMillan +1 646 891 2118 around too many IT services being placed in the hands of too few service providers. [email protected] Regulators on both sides of the pond have had little to say on the issue thus far, with the FCA COMMERCIAL devoting one line to it in its recent cloud computing consultation. But with full guidance expected from Associate publisher Lucy Churchill the UK regulator later this year, don’t be surprised to see scrutiny of the issue intensify. +44 (0) 20 7832 6615 [email protected] This month, HFMTechnology takes a look at some of the key concentration risks facing CTOs and asks Publishing account manager what can be done to mitigate against this (see p10-13). Alexandra Bethanis +44 (0) 20 7832 6618 We also profi le Symphony’s CEO David Gurle to fi nd out more on his plans for creating a secure, [email protected] instant messaging framework which he hopes will become the standard bearer for communication CONTENT SALES across fi nancial services within three to fi ve years. (see p20-21). Group head, content sales Gavin Clink We encountered a man less concerned with the label of ‘Bloomberg killer’ ascribed to his fi rm since +44 (0) 20 7832 6592 [email protected] it launched last year, and more concerned with cornering the buy-side having already established a Content sales broad stable of sell-side fi rms as both investors in and clients of his fi rm. +44 (0) 20 7832 6511 Elsewhere, Coller Capital’s head of IT service delivery Ian Flavill gives his take on hybrid IT solutions [email protected] PRODUCTION (see p14) and Mark Ridgway, partner at Allen & Overy, articulates the key points of the forthcoming EU Head of production trade secrets directive (p24), something CTOs and COOs will both need to be aware of. Claudia Honerjager We also feature a winners’ supplement on p16-19 showcasing all of the winners from last month’s Sub-editors Luke Tuchscherer HFMTechnology US Awards event in New York City. Mary Cooch Alice Burton Enjoy the issue. Charlotte Romeyer Designer Jack Dougherty MARKETING Sam Matthews +44 (0) 20 7832 6574 THIS MONTH’S MUST-READS [email protected] Group head of content Gwyn Roberts +1 646 891 2115 [email protected] Chief executive Charlie Kerr CONCENTRATION RISK SECRET CTO COMPANY PROFILE The risks facing CTOs and how An anonymous CTO discusses Symphony sidesteps they should respond dual data back-ups ‘Bloomberg killer’ label p10 p15 p20 ISSN 2054-3034. Printed by The Manson Group. © 2016 all rights reserved. No part of this publication may be reproduced without written permission of the publishers. No statement in this magazine is to be construed as an invitation to invest in hedge funds. MARCH 2016 hfmtechnology.com 3 REGULATION FCA IT guidance expected this Spring The FCA expects to issue final guidance for UK-regulated firms on outsourcing IT to the cloud in either April or May this year, HFMTechnology has learned. An FCA spokesperson said the regulator was still going through responses to its consultation, which closed on 12 February, before it releases full guidance later this year. While an exact publication date for the full guidance has not yet been finalised, the FCA’s spokesperson told HFMTechnology the regulator expected to release its conclusions around April/May. The FCA began its consultation in Aima said this could effectively “elevate” contractual clause with a provider was not November last year on providing guidance documents, such as its own guide to sound realistic. to regulated firms around outsourcing to practices for cyber-security, to obligatory Requiring physical access to data storage the cloud and other third-party IT services. requirements. could also make it difficult for firms to While many of the proposals in the Concerns were also raised about the use public cloud services, thereby making consultation were welcomed, hedge fund practicalities of aspects of the proposed the FCA’s suggested requirement to ensure trade body Aima responded with a warning guidance. access to business premises problematic. on certain proposals contained in it. Aima said it agreed with the FCA’s Aima therefore suggested the FCA Chief among these was a warning about suggestions on monitoring concentration provide clarification that visiting the office the FCA’s proposition that firms should risk but said it will be problematic to of the cloud service provider would be identify current industry good practice on implement for large service providers sufficient. risk management, which Aima said could with many clients, and smaller firms with Provisions for an “exit plan” suggested by result in a “chilling effect on the amount confidential client lists (see feature, p10). the FCA were also seen as problematic by and type of guidance that it is possible Similarly, Aima said verifying suitable Aima, as it would be “extremely difficult” for Aima and other industry bodies to arrangements for dispute resolution were to enforce compliance to these obligations produce”. in place was useful, but negotiating a on a service provider. PEOPLE MOVES Hudson Structured appoints CTO as it preps first fund Hudson Structured Capital Management consultancy Anchor Solutions, following a (HSCM) has taken on former IT consultant seven-year stint as head of IT application and ex-UBS IT executive David Jackson as management USA at UBS Investment Bank, CTO as its new management team looks to according to his Linkedin profi le. raise assets for its fi rst fund. His hire is one of several key hires made at “BUSINESSES DO NOT WANT Jackson joined the Connecticut-based HSCM, which will focus on re/insurance and IT SERVICE PEOPLE BEING structured credit fi rm in February, nine transportation assets operating a dual-strategy months aft er the fi rm was founded by focused on structured opportunities across the DRACONIAN OR BEING THE managing partners Michael Millette and insurance and reinsurance spectrum as well as ARBITERS OF RESTRICTION” David Andrews, according to information equipment fi nancing across the transportation obtained by HFMTechnology’s sister title Alt sector with a specifi c focus on aviation. IAN FLAVILL, HEAD OF IT SERVICE Credit Intelligence. Hudson Structured opened its offi ces in Before joining HSCM, Jackson spent eight Stamford, CT in January and fi led an ADV DELIVERY, COLLER CAPITAL years as the owner of Microsoft Gold certifi ed with the SEC on 29 February. SEE P14 4 hfmtechnology.com MARCH 2016 INFRASTRUCTURE REGULATION QFR moves to hedge fund hotel SEC warns over QFR Capital Management (QFR) has Steinman has since joined Element cyber-attack moved into a hedge fund hotel after assets Capital Management, his LinkedIn profile tumbled to $103.5m amid a turbulent showed. reporting period for global macro traders. Hedge fund hotels typically provide New York-based QFR, which managed emerging managers with office space The SEC has warned that the hedge funds will around $3.5bn in 2013 according to reports at lower rates, often combined with face much tougher enforcement penalties if at the time, now operates from office space technology, infrastructure and operational they fail to report cyber breaches. provided by IT firm Eze Castle Integration. support. Speaking at the SEC Speaks annual confer- The discretionary macro firm has also QFR would not comment on the ence in Washington, deputy director of the SEC seen several recent staff departures, but a restructuring of its operations or reasons division of enforcement Stephanie Avakian said source close to the situation insisted the behind its AuM decline. the SEC was aware some registered firms were firm is not closing. The firm’s 13F filings from 2015 failing to report cyber breaches. The regulator Director of technology Glenn Souther revealed it had significant exposure to produced no data to back this up but said it has left around the end of January following Argentina, with the firm taking positions heard anecdotally that companies are reluctant QRF’s move from its Bryant Park location in companies such as Buenos Aires-based to report breaches in case they face an investi- to 529 Fifth Avenue. private bank Grupo Financiero Galicia, gation over their own systems and controls. Operations associate Sohel Hussain and agricultural firm Adecoagro and energy Avakian said registered firms fear they could portfolio manager Pablo Duran Steinman firm Pampa Energia.