AIX and UMB partner for alts straight-through processing

Philadelphia-based Alternative Investment Exchange (AIX) is developing a direct data connection with UMB Fund Services.

The connection will let AIX directly transmit subscriptions and new accounts. This will do away with the costly manual interventions and the reliance on paper that such administrative processes have long involved.

This means straight-through processing for alternative investments. In the words of Brad West, AIX’s chief operating officer, “Paper documents, wet signatures, and PDF documents that must be re-keyed made it especially challenging to automate processes such as opening accounts and onboarding new customers.”

That challenge has now, it seems, engendered a definitive response. AIX can now move data seamlessly to UMB, minimizing the documentation that arrives at its destination NIGO (not in good order), reducing administrative headaches, and cutting costs for the back office.    

In a release, AIX pointed to a connection between the modernization of administration and the COVID pandemic. During the height of the pandemic, “and despite quarantine orders, many paper-reliant fund administrators were forced to keep offices open so that redemption requests could be processed, and compliance requirements were met.”

Mike Huisman, senior vice president, director of transfer agency at UMB Fund Services, said: “The pandemic accelerated our path in leveraging technology to automate our business, create efficiencies, and address risk and liability issues tied to paper and manual processes. Our vision, which has been realized by integrating with AIX, was to automate the subscription, maintenance, transfer, and redemption processes of alternative investments.”

UMB Financial Corporation (UMBF 109,64 +0,75 +0,69%), the parent corporation of UMB Fund Services, is a financial services company headquartered in Kansas City, Mo. It has had a good year to date: its stock entered 2021 below $69 and as of this writing is above $102. That’s an increase of close to 50%.

UMB Fund Services, headquartered in Milwaukee, offers a complete line of products and services to the fund industry, including fund administration, fund accounting, tax, investor services and transfer agency, distribution and custody.

Christopher Faille

Christopher Faille has written on a variety of legal, regulatory, and financial issues for decades. He is the author of "The Decline and Fall of the Supreme Court" (1995), for example, and the coauthor, with David O'Connor, of "Basic Economic Principles" (2000). He was an early reporter with Lipper HedgeWorld and has contributed to Forbes and to the Hedge Fund Law Report.
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