The survey of its readership will help us to gain insights that point the way for improvements in reference data management. Once the responses are collected, an analysis will be sent to all survey participants and a downloadable report will be available on www.ftfnews.com.

Upon completion of this short survey, you will be entered for a chance to win a FREE Kinect for Xbox 360! (Limit of one entry per respondent.) This survey will be running until Thursday, March 8th, and we will be selecting a winner at random on Friday, March 9th, so be sure to enter today!

Good luck and we appreciate your participation!

Take me to the Survey

Check out all the fun you can have with your Kinect. You are the controller!

So as you can imagine, the history buff in me has been dying to pop into the museum and try the restaurant, but unfortunately, not everything went to plan that afternoon!  In fact, our lunch was a disaster!  The service was terribly slow, which I can often overlook, but not so much when all staff avoid your gaze and refuse to come to your table for any reason.  Also, I was a little put off when the table to our right found a hair in their food and the table to my left received the wrong order.  To say the least, we did not leave there with a good impression… and since the service was so slow I basically had to inhale my food and I never had the chance to check out the museum!  They may have just been having a bad day, but I think it will be a while before we head back to Fraunces Tavern.  Although, I do have to say, they did have a good beer selection so it would probably be a good spot for after-work drinks!

A solution built around a Service-Oriented Architecture (SOA) is the key to a solid and flexible architectural foundation. Without SOA, software providers like XSP could not inherently take advantage of THE most important disruptive technology since the advent of the Personal Computer: The Cloud.

Peel away the marketing hype and the Cloud may appear to be a simple concept that has been around for decades in the computing world – that is, a model of providing software from a remote location, over a network, where the organization using the software does not have to be involved in the day to day running of it.

So why the buzz about all things Cloud? The Cloud is about much more than just hosting an application. It’s transforming the way that software is provided and consumed. The Cloud frees people and organizations from being tied to the desk or expensive, tedious software deployment and support models. The Cloud removes the artificial barriers that technologists have placed around software and solutions so that people can interact with information in a more natural, intuitive manner. The Cloud removes fear and uncertainty; it falls more into line with what we, as consumers, have come to expect with other ubiquitous forms of technology, like Television or the microwave oven. Push a button and it works. We, as consumers, do not need an understanding of nuclear engineering to warm a cup of tea. Why should we then be expected to care about TCP/IP, HTTPS, and other fundamentals of network engineering and software engineering if all we want to do is share a picture with friends or access reference data from different parts of the world?

The concept of the Cloud is deceptively simple. It’s important to understand that the Cloud encompasses several concepts that, until the advent of ubiquitous, high-speed access to data networks (e.g. Broadband Internet, Wi-Fi and 3-or-4G), were not really economically or technically feasible. These concepts include Virtualization, Multi-Tenancy and Software as a Service.

Virtualization is an important ingredient in the Cloud because it removes the physical constraints on the hardware systems that support applications in the Cloud. The ability to virtualize servers or simulating multiple machines on a single physical machine is a crucial step in defining the Cloud because it makes hosting of software applications more cost effective and simpler to manage. Virtualization also paves the way for multi-tenancy, which is where a single instance of software runs on a server and available to multiple client organizations (tenants).

Multi-Tenancy allows applications to host different client organizations without requiring additional hardware components. In a Multi-Tenant environment, multiple customers share the same application code, running on the same operating system and hardware with the same data-storage mechanism. The distinction between the customers is achieved during application design, thus customers do not share or see each other’s data or configurations.

Software as a Service (SaaS) is a model of software delivery in which software users only pay for what they consume. It is built upon the underlying concepts of multi-tenancy and, in many cases, virtualization, and is the predominant business and operations model in the Cloud.

In short – the Cloud is an enablement platform for business. Users of business applications simply expect things to just, well…work. They should not be experts in the underlying complexity. Software’s complexity should be reduced to the simplicity of a button.

I read a very interesting article in the Wall Street Journal last week, which explained how public pension plans have become extremely dependent on making “alternative” investments. The article, Weaning Off Alternative Investments, cited South Carolina’s public pension plan strategy as an example of this dependence, although I’m sure other states follow their model as well.

South Carolina has almost half of its assets invested in hedge funds, private equity and other alternative investments, and now they are considering the fact that it may be time to cut back on these kinds of investments. Curtis Loftis, the South Carolina state treasurer, is tired of the high fees and complex terms associated with the state’s alternative investments, and has recently requested a review of their dealings with private equity firms and hedge funds. Ultimately, Loftis would like to reduce the state’s exposure to these types of investments.

This is easier said than done, however, since most public pension funds are pressured to hit a specific annual return in order to “satisfy pension obligations to thousands of teachers, clerks and other state employees without having to increase contributions from the state.” In the end, it seems that alternative investments offer the best chance at hitting those targets. On the flip side, it is difficult to assess if alternative investment strategies are working because they involve less liquid assets and can take years to produce big payoffs. Investment fees are also rising steadily year after year.

So what is the answer? Should public pension plans eliminate alternative investments from their portfolio or increase their alternative investments in order to reach their annual return target? I believe it is a balance between the two. Public pension plans should scrutinize any type of investment made and make sure it is the best possible one. Alternative investments are needed in order to see a large return, but anyone should be wary of putting all of their eggs in one basket. Check out the article for yourself and let us know what you think.

Where does the FTF office stand on this you may ask?  Well, we’re split today. While I am first and foremost a New York Jets fan, I am pulling for a Giants win, while my colleague Sarah grew up in New England and is rooting for the Patriots all the way! So we are asking you, our readers, to let us know which team you’re routing for in this year’s Super Bowl. Who do you think will take home the coveted Lombardi Trophy? Leave a comment to show what team has more pride – a New York team or a New England team – really this should be easy!

Even though competition makes up a huge part of the game, it should come as no surprise that we here at FTF also have a focus on what food we want to serve this Sunday! Here are some recipes on our game day menu:

Corn Dog Muffins (I’ll link it)

Football Pizza Pockets (http://picturetherecipe.com/index.php/recipes/game-day-snacks-football-pizza-pockets/)

Pretzel Bites and Honey Mustard Dip (http://www.blogher.com/frame.php?url=http://www.twopeasandtheirpod.com/homemade-soft-pretzel-bites/)

Homemade Oreos (http://www.cooks.com/rec/view/0,1610,146190-251197,00.html)

…and just add your favorite game day Chili recipe!

These delicious snacks should be able to bring even New York and New England Fans together! Have a great Super Bowl Sunday!!

Guest Contributor:

Ah…new rules, new regulations. They are often times met with a mixed and not always favorable reaction. For one thing, they aren’t always easy to write. Just ask the folks over at the SEC and CFTC. In early January of this year, we learned that both regulating bodies have already missed over 140 deadlines in their task to compose all of the new Dodd-Frank rules.  Perhaps more importantly, complying with new requirements can be equally daunting, often exposing shaky information systems workflows or introducing inefficiencies.  Case in point:  the Emergency Economic Stabilization Act of 2008 (EESA 2008) and its requirement that Brokers now include cost basis and holding period information as part of the 1099(b)s they generate for their clients. Let’s take a closer look at this.

Legacy approach for calculating wash sales

The first year of the three-year EESA 2008 rollout has just come to a close, and according to the new reporting requirements, the cost basis on the current version of 1099(b)s now must include adjustments for wash sales. Accurately calculating wash sales is no easy feat, however, in some cases, Brokers make this already complex task more challenging.  This happens when they adopt an approach to tax analysis that requires gains and losses to be recalculated before the firm’s wash sale adjustments can be determined. The only way for wash sales data to be accurate is if the gains and losses calculated by the wash sale system first match the gains and losses from the Broker’s system. This simply isn’t always the case, and that spells trouble, let alone redundancies in workflow. Inaccurate reporting to the IRS could potentially lead to painful audits, hefty fines and fewer clients. Incorrect data on wash sale disallowed and re-allowed losses can result in over or underpaying taxes and an undesirable impact on the investor’s bottom line. When firms do not properly reconcile before generating their wash sale results, they open themselves up to the IRS pain-points cited above as well as unhappy clients / investors.

A Better Way – avoiding / eliminating reconciliation issues related to wash sales reporting

Well, how are reconciliation issues avoidable? How can compliance with cost basis reporting be made easier, while also having the means to determine ways to optimize profit and loss with your wash sales calculations? Arguably, the most challenging aspect of accurately determining gains and losses is the complex task of determining lot retirement— identifying which shares are retired every time a stock is sold. A Broker’s system already addresses this, and among other things, accounts for more complex transactions, such as when a series of purchases overtime has been made (as with dollar cost averaging) and/or when a sequence of sales over time has been executed.  What’s new for Brokers is the wash sale engine component and how it’s integrated into their workflow process. In the case of wash sale reporting, there is a better way:  a streamlined workflow process that feeds existing tax lot retirement data directly into the wash sale system, avoiding the addition of a costly, time-consuming and error-prone reconciliation step that comes along with the act of recalculating gains and losses.

In order to truly know your tax liabilities, wash sale calculators need to be fed accurate lot retirement data in order to properly identify disallowed and re-allowed losses. Otherwise, you are looking at inaccurate information flows both into and out of the system – a dilemma that could raise problems with auditors. The IRS recently announced that it audited more millionaires in 2011 than the previous year—four percent more to be exact.  In 2010, eight percent of millionaire earners were audited and the number jumped to 12 percent in 2011. This begs the question:  will increased audit pressure on millionaires force hedge funds to re-examine the accuracy of their tax analyses and K-1s? Perhaps now, more than ever before, compliance—accurate, efficient compliance—should be the utmost priority.

I think what was most enticing from this report was the time that could be saved from mobile banking.  Now, this of course is a no brainer, being able to do banking on-the-go would save you time!  But after reading an article from the WSJ really showed some of the perks like being able to approve wire transfers and tagging your business purchases in real-time so you don’t have to go back and scour through your monthly reports.  For me, I think that would save tons of time.

As always, some are still uneasy about the security of mobile banking.  Unlike when you go to the bank and make a deposit through an ATM or at the teller, if you make a deposit online you can take a picture of the check and send it online, just like that.  But you don’t get a receipt with the online method, and that is where some people get nervous.  A majority of us still like to have that piece of paper that proves we had that money.   That’s why according to Aite’s report 42% of respondents don’t believe the mobile channel is secure enough for paying bills.  Obviously though, as with any change, it will take time to get the hang of things and trust the system.  Even with the few concerns around security and not receiving formal proof of transactions, what I see most from this report is the growing interest in mobile banking.  Aite estimated that by 2013, 50% of small businesses will be banking through mobile devices.  But now the question is, even though mobile banking works for small businesses how will this cross over into larger institutions?  I wonder if the big boys will switch to mobile banking for their minor transactions as well.  Is it even realistic to think that large companies can completely rely on mobile devices?  That’s what I’m out to discover now!  Hopefully this question and many more will be answered at our conference in May!

Haru Sushi, which is located at One Wall Street Court, is definitely worth a visit! The atmosphere is perfect for a client lunch. When you walk into the restaurant you’re greeted by a room with high ceilings, tons of comfortable seating and just an overall great ambiance. It’s not too loud, which makes it a great place for people to talk shop with clients. Not to mention that the food is absolutely delicious!

I can’t speak for my fellow lunch mates, but my meal was delectable. I ordered the Calamari Salad and an Eel and Avocado Roll and devoured it in less than 10 minutes flat. Mine must not have been the only great meal because none of us left a single morsel on our plates. The staff was friendly and attentive, always checking in to see if we needed anything and to see how we were getting along. I would recommend Haru Sushi to all – whether for a client meeting or just a meal with a friend, it is a great place to go! I just hope we can find more places in the Financial District that live up to it. If you have any suggestions let us know!

In some cases you are mandated to do RFPs for your product selections.  Don’t do RFPs as a reflex action.  The RFP is mostly a waste of time.  Vendors always lie on RFPs to get high scores and qualify for your short list.

The RFP is only good to flesh out business requirements, but you have a good methodology in place for that, right?  If you have decided to go the “buy” versus “build” route, you almost certainly have a few vendor products in mind.  If there’s more than a few, your scope is probably too broad.  If you don’t have a short list, ask your colleagues and associates in other firms or a trusted consultant.  Whatever you are doing has been done before by someone, so there’s a best practices lurking somewhere.  A far better approach is to do a proof of concept.  If there are any unknowns (and let’s face it, there are always unknowns) about the products you are considering, the POC is a must.

If two vendors are very close in feature set, then do a POC in the form of a bake-off; this will give you a feel for the implementation teams and how well they work with your in-house team.  Indeed, do a POC before you commit, even if you have already decided on one vendor.  There’s a cost of course, but you at least you can avoid many wasted months (or years!) and lots of agony.  The key is really nailing your requirements, keeping the scope narrow and managing the POC correctly.  The purpose of the POC is to eradicate unknowns.  The POC, if designed properly, will not be a throwaway, will help you focus on the real requirements, and probably expose a few more unknowns (expand the POC).  

Here’s a high level guide to an effective POC:

1. Use the version of the product you are actually purchasing;
2. POC deliverables should be broad but not deep.  Excise a tiny subset of each business requirement;
3. Use your own business requirements, not the vendor’s feature list;
4. Use your own data in the POC, not the vendor’s.
5. Use the actual implementation team who would do the real product work;
6. Base the POC on a solid list of business requirements.  The “what”, not  the “how”. The “how” is the product, and you haven’t picked it yet.  Don’t use vague terms like “demonstrate support for”.  Language should be specific and measurable.
7. Any unknowns, including non-functional requirements (like performance characteristics) should be included, time permitting;
8. Timebox your POC.  Make sure all products start and stop at the same time;
9. Ask the vendors which areas take the most time to implement in their experience.  If they can’t answer you, drop the vendor.  Consider including those items in the POC;
10. Required changes to in-house systems should be included in the POC (remember – tiny fraction only, just to expose unknowns).  You’ll find out how well the product integrates in your environment, gets the in-house team involved in the project, and will help you in post-POC project estimating;
11. Try to include the entire life cycle of data in the POC;
12. Run the POC like any project, with a project manager, deliverables, resources, etc.

In my next blog post I’ll walk through the details on how to craft a successful POC with a real-life example:  selecting a multi-asset class trading platform for an asset manager.