Risk Management

Proactively Managing Risk

In the aftermath of the financial crisis, the environment in which financial firms operate has become more risk conscious, and what constitutes effective management of risk has become a focus of legislators, regulators, as well as corporate directors and executives. Securities lending has not been immune from this renewed risk consciousness. Following the failure of Lehman Brothers, counterparty risk and the risks surrounding the investment of lenders’ collateral became the focus of lenders, borrowers, and agents alike. Advanced Securities Consulting assists clients on all sides of securities lending transactions to better understand and manage the risks associated with securities lending:
  • Credit/Counterparty
  • Market/Systematic
  • Operational/Best Practices
  • Contract Assessment and Analysis 
  • Affiliate Conflicts of Interest

Litigation Risk Management

The potential for litigation has become a major focus of risk management for financial firms. Managing this risk requires not merely legal expertise, but also a firm grasp of business operations, transaction flows, corporate governance, and the ability to understand and analyze financial data. ASC assists financial firms to manage their litigation risk by helping them understand their exposures, assess their internal compliance controls, and assemble the data necessary to defend successfully when lawsuits arise.

Proactive Approach

ASC employs a proactive approach to helping firms prevent and address litigation. Managing litigation risk effectively can be enhanced significantly by employing the right data and the right kind of analysis at the right time. ASC can help firms to assess in advance what kinds of data could be most helpful in potential litigation situations, building a "war chest" of financial, transactional, and statistical data to head off the next major litigation threat. ASC also helps financial firms to manage their their potential exposure to litigation by performing in-depth contract reviews to determine how individual provisions might be improved and strengthened, reducing the firm's overall litigation risk profile. The work ASC does for clients can help win, not only at the summary judgement stage, but also by discouraging lawsuits from being filed in the first place.

Improving Oversight

ASC advises boards of directors and executives on their responsibilities with regard to litigation risk. The firm can provide comprehensive education and advice to boards and managers on matters of compliance as well as how to improve their overall litigation risk oversight processes. In addition, ASC can help fund boards and their counsel to oversee lending agents by rigorously assessing the level of a securities lending agent’s compliance with the fund's contract terms and investment guidelines