Swift messaging framework for hedge funds gathers pace

Swift messaging framework for hedge funds gathers pace

Financial messaging network Swift is looking to extend its influence into the hedge fund sector with the introduction of a new set of message standards for automating communications in the transaction chain.

Over 20 firms are now signed up to Swift's hedge funds harmonisation project (Sharp) which aims to implement a framework based on up-and-coming ISO20022 standards to automate processing between custodian banks, administrators and transfer agents.

The majority of firms signed up to the Sharp initiative are from from Luxembourg and Dublin and represent the majority of global assets under administration.

The Sharp initiative is aiming to adapt the work already undertaken by Swift in mutual funds and extend it into other paper-driven asset administration processes.

The first batch of new message standards are expected to be tested early next year. However the new messaging will not eliminate all paper-based processes as some documentation is required to comply with know-your-customer and anti-money laundering regulations.

Swift is also thought to be in discussions with markets in Japan and the US about implementing the messaging infrastructure beyond European shores.

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