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Know Your Customer (KYC) is Becoming More Important Than Ever

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The phrase “Know Your Client”, “Know Your Customer”, or “KYC” for short is becoming a more important term as an increasing number of global institutions are entering the fray, engaging in more alliances and transactions and working together on capital-intensive efforts. KYC is becoming increasingly vital as regulations sprout and fiduciaries should know what kind of party with whom they are dealing. As KYC compliance proliferates, we have witnessed a dramatic increase in our corporate subscription business. Record-breaking fines issued by financial regulators globally, especially in the West, is making KYC compliance a center point issue. Scandals can destroy a financial institution.

KYC is not just about regulation. It’s also about with whom a fiduciary plans on undertaking transactions. Will this institutional entity be a fair partner in a club deal? Do they have substantial assets? Counterparty risk? Who owns the institution, and what is their governance like?

SWFI provides detail on more than 275 institutional entities including people, external fund managers, assets and other important information that cannot be gleamed from the top layer. SWFI is committed to covering more institutional entities. In addition, we also permit our clients, at times, to request institutional entity inclusion, a tremendous benefit that allows the customer to set the menu, versus the provider.

SWFI is investing more into our research area which, again, is growing fast.

World Powers

With that being said, SWFI foresees more cross-border investment in the years to come, despite growing nationalism in certain countries. Big brother and little brother, terms referenced between the U.S. and China, will continue a push-and-pull relationship in the decades to come. Russia, China, India and Europe are not going anywhere, which is why periods of conflict and resolution will vacillate.

Institutional investors should attend conferences and meetings in other countries, or at least make sure the delegation of attendees is somewhat international. This is what SWFI tries to do when we host our summits and forums. We try to get as many international high-level delegates as possible, even in Scottsdale, Arizona. Getting a world view, not just from a “consultant”, but from actual practitioners and policymakers are paramount when making decisions regarding your portfolio. Lastly, SWFI tries to get a diverse point of view. We bring together ESG believers and non-believers, smart beta lovers and haters, and even optimists and doomsayers. Dialogue, respect and debate are core tenets of SWFI conferences.

Michael Maduell

The views in this article are expressed by Michael Maduell.
Michael Maduell is President of the SWFI.
www.swfinstitute.org

SWFI First Read, January 16, 2018

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BP Plans to Take $1.7 Billion Charge to End Legal Claims on Deepwater Horizon

BP Plc is planning to take a US$ 1.7 billion charge to end legal claims regarding the disastrous 2010 Deepwater Horizon spill in the Gulf of Mexico.

Ethereum Co-Founder Leaves Fenbushi Capital

Vitalik Buterin, a co-founder of Ethereum, which is a cryptocurrency, exited China-based Fenbushi Capital. Fenbushi Capital was formed in 2015. Buterin is retaining his role as an advisor of Fenbushi Capital. Buterin dropped out of the University of Waterloo in 2014 when he got a Thiel Fellowship. This permitted him to work on Ethereum full time.

Kingdom Holding Sells Four Seasons Beirut Hotel Stake

Saudi Arabia’s Kingdom Holding sold its position in the Four Seasons Hotel in Beirut for roughly US$ 100 million. Blominvest, a unit of Blom Bank, advised on the transaction. The Four Seasons will continue to manage the property.

Mercer Signs Deal to Buy BFC

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Deutsche Bundesbank to Slowly Add Renminbi into Foreign Reserve Mix

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Deutsche Bundesbank’s executive board made a decision to invest in Chinese renminbi in the summer of 2017 as part of its foreign currency reserves. The German central bank on January 15, 2018, confirmed it will start investing in Chinese renminbi and also consider investing in additional foreign currencies. The move mimics the European Central Bank (ECB), which already considers the Chinese renminbi as a reserve currency. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Bpifrance, CDB and Cathay Capital Launch Third Cross Border Fund

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Bpifrance, China Development Bank Capital Co., Ltd. (CDB Capital) and Cathay Capital agreed to launch Sino French Midcap Fund II. This is the second fund the group is launching after the €500 million Sino French Midcap Fund I from June 27, 2014. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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