Activity Based Costing or Management

Back testing and Benchmarking Understanding the mechanisms of formation costs to identify areas for improvement in profitability is the primary purpose of the ABC / ABM (Activity Based Costing / Activity Based Management). It is indeed a powerful analytical tool which allows to decompose and analyze the costs of products and services sold (to customers both internal and external clients).

Policymakers have through this method of indicators structured to enable them to consider changes and simulate their impact in terms of costs and therefore profitability. By the adaptation of the process, creating a new product, the projection of a new organization are guidelines that can be accurately valued using the ABC model. Officials thus have elements that accompany in their projections and decision making.

The method is now developing rapidly in Financial Services, with a view to constantly improving the profitability of operations. The factoring industry is no exception to this trend in a context of shrinking margins, among others. It is now necessary to drive a very thin cost of each activity and each service. Furthermore, the implementation of this approach is the opportunity to industrialize its processes (if not already) and to induce a change in the behavior of internal company departments (development policy consumption of resources and activities, awareness of the concept of internal customers requiring a relationship and level of service as professional as the end customers).

The objective of this is to illustrate the development and gains of the method applied in the context of factoring.

The euro is still down because of the Greek debt

The euro is still down penalized and remains under 1.44 dollars. This decrease is due to contamination of the single currency by the debt crisis that has invaded Greece and continues to do its thing. An urgent solution is needed!

After the decline experienced by the euro last Friday, the Euro has not had his best performance this Monday either. It seems that money is slow to find its stability. The Arab Spring, revolts in Spain and Portugal are to blame.

The Euro went back a bit against the Japanese currency to 115.44 yen against 115.22 yen Friday. The dollar was in recovery against the yen at 80.48 yen 80.31 yen against Friday night.

Rising interest rates and expectations of an increase in reinforcing the attractiveness of a currency, especially against the dollar, which offers a yield close to zero since the outbreak of the financial crisis in 2008.

However, investors seem to focus again on the lack of compromise in Europe to offer financial support for Greece which is in great economic difficulty.

Germany's persistence that private creditors share in the cost of the subsequent plan projected aid for Greece is about to be discussed by the working group in charge of the euro area to achieve a coherent plan.

European currencies have also affected from unsatisfactory level indicators of industrialized manufacturing in the euro area than in the UK but also in Sweden.

Adoption of the Directive ISA, Was it a compromise? Part.IV

The burden of proof is reversed, the depositary and will be responsible for loss of assets under custody unless he can prove that the loss is the result of an external event, beyond its reasonable control and the inevitable consequences. The proposal adopted, which evokes a "reasonable control" of custodian, is less severe than the original text. The depository will retain the option of using the sub-delegation, initially excluded, to transfer its contractual responsibilities, which will be accompanied by due diligence work and reporting to the authorities further.

The lobbying industry seems to have paid to alleviate the new obligations. The profession can still expect some changes coming about the chain of responsibility, because it seems that the Commission expected the adoption of the Directive before opening the ISA site clarifying the responsibilities of the holders of UCITS, and this is likely to make changes at least as demanding.


The vote by the European Parliament Directive ISA shows how the negotiations were laboring among the proponents of a regulatory status quo and those seeking tighter control of the financial industry. As usual all the European players have found a compromise of the confession of all is a "lesser evil". But unlike the UCITS IV Directive which was carried by the entire profession, this directive was made reluctantly ISA and its scope is thereby limited. While hedge funds are going to have a regulatory framework in Europe but it is relatively flexible. Nevertheless, the establishment of ESMA is a breakthrough that will require the supervisor to give the EU means to realize its ambitions to acquire a globally recognized authority. The problematic status of depositories is idle and this will invite themselves to the agenda of the future Directive UCITS V. The vote of the Directive ISA is a first step and the path is far from complete.

Adoption of the Directive ISA, Was it a compromise? Part.III

The agreement on the principle of supervision by ESMA passport allows France to take the chairmanship of the G20 in a strong position on the progress of work relating to the supervision of European financial markets.

Directive ISA ruled on the delegation of function of management companies and hedge funds of their depositors. Overall it adds considerably to its terms.

The delegation function is to use a third party to perform the tasks for which an actor is originally mandated. At the management company of AIF, the delegation of two types of functions, portfolio management and risk management, will now be regulated by the Directive. A management company will want to use will now justify an objective reason to use it in order to increase efficiency in the conduct of its business. But it should also be noted that the legislative framework has eased since the adopted version includes the possibility of using the sub-delegation, the possibility of missing the European Commission proposal of April 2009. However, the reporting requirements are considerably increased and the Directive specifies that the management company may delegate to the verge of becoming a "mailbox company", a term already used in the UCITS Directive.

At the depository, the Directive makes a significant change in its area of responsibility by delegating its functions. It is imposed an obligation of result as it was until now under an obligation of means (having led the due diligence necessary to meet the quality standards expected). Although Made off has already dramatically changed the spirit of the obligations to be met by depositories, with the conviction in France of two players to repay funds whose assets were delegates at Lehman Brother, nothing was previously written in this form. The consultation on UCITS depositaries, led by the European Commission during the summer of 2009, had already identified a need for clarification of the responsibilities of trustees. It seems that the message was taken up for hedge funds.

Adoption of the Directive ISA, Was it a compromise? Part.II

The main idea of the Directive is to oversee the marketing within the EU funds alternative:

* Non-European societies and non-domiciled in Europe;
* European societies but not domiciled in Europe;

through the award of a European passport attached to the funds must undergo an enhanced transparency, the image of what the UCITS IV Directive (Undertakings for Collective Investment in Transferable Securities) is doing for European UCITS funds.

Few countries has long opposed a plea in the European passport, claiming that only a passive marketing of these funds along with the status of private placement is appropriate, given their investment strategy and level of risk. The main risk cited to support this position was to see a licensing procedure more or less flexible according to each European country. Some might be tempted to offer a more flexible regulatory framework to capture the domiciliation of funds at the expense of other countries, with the consequence of pulling down the quality of the passport. In the final stages of negotiations, France has finally decided on the European passport, provided that it is more strict, that is to say, supervised by the future European authority market supervision (ESMA) who will take office on 1 January 2011 (and not only by the public authorities of member countries). The passport will be introduced from 1 January 2013 to cohabit with the national authorities until 2016 to allow time for ESMA to adjust its standards. ESMA will ensure that non-European countries, host of hedge funds, comply with the principles of the regulations in force within the EU. It is also anticipated that in 2015 the Commission makes an assessment of the implementation of the directive and to pronounce on a possible extension of the powers of ESMA.