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MBOR: The New Paradigm in Investment Accounting

First came Accounting Book of Records (ABOR), then Investment Book of Records (IBOR), followed by Alternate GAAP view. Now the next generation is here: Multiple Books of Record (MBOR), allowing full accounting automation from a single control point.

How to do more with less? It is a key challenge facing all investment management industry participants, as they strive to deliver outstanding customer service while wrestling with intensifying regulatory demands, and the need to manage risks and control costs.

To attract capital, many asset managers have introduced technology promising lower risks and more stable returns. Yet they may also add new layers of complexity into the investment accounting function. Likewise, the growth of cross-border trading – with the multiple currencies and different tax and accounting regimes that result – places onerous burdens on asset managers and servicers responsible for tracking the daily portfolio valuations. This invariably leads to a requirement for multiple sets of records, which are often housed on separate platforms. The result? Significant operational overhead, and the constant risk of misalignment.

Managing this complexity and operational risk, while increasing efficiency and agility, are critical to the success for institutions. Crucial is having the right technology in place to automate and standardize processes, and thereby better manage information, enforce more stringent controls and foster growth without a corresponding rise in costs.

Investment Accounting Evolution

Previously, equipping asset managers and service providers with a combined investment book of record (IBOR)/accounting book of record (ABOR) capability gave them the potential to extend their services beyond traditional back office functions.  This technology supports real time views of current traded positions and exposures needed by the front and middle office for effective portfolio management.

The accounting evolution is now reaching a new level with the rollout of pioneering Multiple Books of Record (MBOR) functionality. By leveraging MBOR, users have the facility to create up to 10 additional views within an account structure. Each view is available online in real time and can be set either to effective date or trade date accounting (supporting post execution replay and recalculation for tax assessment), and be restated into multiple base accounting currencies.

MBOR is a paradigm shift for industry participants, bringing with it significant advantages in operational efficiency and data integrity. Armed with MBOR an institution can redeploy resources from previous redundant functions and more optimally grow a business without adversely impacting costs.



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