Investment Mandates
IPS modeling, compliance rule libraries, limit types, rule inheritance hierarchies, and exception management in Asset Atrium Manager.
Mandate sources
Investment mandates in Asset Atrium originate from three sources: the fund prospectus (legally binding investor-facing limits), Investment Policy Statements (IPS) (client-specific guidelines), and regulatory requirements (UCITS, AIFMD, SEC). All three are modeled as compliance rules and evaluated together.
Mandate rule library
Asset Atrium maintains a centralized rule library where compliance teams define reusable rule templates. Each rule template specifies a limit type, applicable asset class, threshold parameters, and breach severity. Rules are assigned to funds individually or through inheritance from fund groups.
| Rule Type | Description | Parameter Example | Breach Severity |
|---|---|---|---|
| Percentage Limit | Maximum or minimum portfolio weight for an asset class, sector, country, or issuer | Max 5% in single issuer | Configurable |
| Absolute Limit | Maximum notional or quantity exposure in a specific instrument or currency | Max USD 50M in OTC derivatives | Configurable |
| Count Limit | Maximum number of positions meeting a condition | Max 3 unrated bond positions | Soft |
| Rating Floor | Minimum credit rating for individual holdings or weighted average portfolio rating | Min avg BBB-; no holdings below CCC | Hard / Soft |
| Duration Limit | Portfolio effective duration must stay within a band | Duration between 3.0 and 7.0 years | Soft |
| Liquidity Ratio | Minimum percentage of portfolio that can be liquidated within N days | Min 80% liquidatable in 5 business days | Soft |
| Restricted List | Instruments or issuers explicitly prohibited from the portfolio | No tobacco companies; no sanctioned entities | Hard |
| Eligible Universe | Only instruments from a defined universe may be held | Only MSCI World constituents | Hard |
| Relative-to-Benchmark | Exposure deviation from benchmark within allowed tracking error band | Sector weight within +/- 5% of benchmark | Soft |
Rule inheritance hierarchy
Asset Atrium supports a hierarchical rule assignment model. Rules defined at a higher level are inherited by all funds in the hierarchy. Fund-level overrides can tighten inherited limits but cannot relax them (unless explicitly authorized by CCO).
| Hierarchy Level | Scope | Override Behavior |
|---|---|---|
| Firm-wide | All funds managed by the firm | Cannot be relaxed at lower levels |
| Fund Family / Umbrella | All sub-funds under an umbrella structure (for example, SICAV) | Inherits firm-wide; can add or tighten |
| Share Class Group | All share classes of a fund | Inherits umbrella; can add or tighten |
| Fund / Sub-Fund | Individual fund or sub-fund | Inherits parent; can add or tighten; relaxation requires CCO approval |
| Sleeve / Strategy | Portfolio sleeve or strategy bucket within a fund | Inherits fund; limits apply to sleeve NAV |
Inheritance lock
Firm-wide and regulatory rules are flagged as locked in the rule library. Locked rules cannot be modified or overridden at any level in the hierarchy. Only the Chief Compliance Officer can unlock a rule, and the unlock action is recorded in the compliance audit trail.
Mandate lifecycle
- Fund onboarding: Compliance team models the fund prospectus, IPS, and applicable regulatory limits as rules in Asset Atrium.
- Rule assignment: Rules are assigned to the fund directly or inherited from the hierarchy. Effective rule set is computed.
- UAT validation: Rules are tested in simulation mode using historical portfolio data to verify expected behavior.
- Activation: Rules are activated for pre-trade and post-trade compliance. Activation date is logged.
- Mandate change: When IPS or prospectus changes, rules are versioned. Old version is deactivated; new version activated. Both versions are retained for audit.
- Fund termination: Rules are deactivated upon fund liquidation. Rule history is retained per regulatory retention schedule.
Rule versioning
Every change to a compliance rule creates a new version. Asset Atrium maintains the complete version history including:
- Effective date and expiry date for each version
- User who created or modified the rule
- Approval chain (4-eye for rule changes)
- Reason for change (free text + change category)
- Diff between previous and current version (parameter changes highlighted)
Exception handling
In specific circumstances, a fund may require a temporary exception to a mandate rule. Asset Atrium supports formal exception management:
| Exception Type | Approval Required | Duration | Monitoring |
|---|---|---|---|
| Temporary limit relaxation | CCO + PM + Fund Board (if prospectus limit) | Max 90 days; renewable once | Daily compliance check continues; exception flagged in report |
| New instrument eligibility | Compliance Officer + PM | Permanent (new rule version) or time-limited | Pre-trade checks updated immediately |
| Regulatory grace period | Automatic (system-configured per regulation) | Per regulation (for example, 30 days for UCITS passive breach) | Countdown visible in breach manager; auto-escalation at deadline |
| Benchmark transition | Compliance Officer | Until rebalance complete | Relative-to-benchmark rules suspended with audit flag |
Bulk rule assignment
When onboarding a large fund family (for example, 50+ sub-funds under a SICAV), use the Asset Atrium bulk rule assignment feature. Define rules at the umbrella level and apply them to all sub-funds in a single operation. Fund-specific overrides can be applied afterward.