State Street Enhances PAM® Platform to Enable Client Compliance with IFRS 9

BOSTON--(BUSINESS WIRE)--

State Street Corporation STT today announced enhancements to PAM® for Investments, its comprehensive accounting and management platform, to help clients comply with the International Accounting Standard Board's IFRS 9 (the Financial Instruments mandate), which replaces IAS 39 and goes into effect January 2018. This new standard, which impacts all entities with financial instruments on the balance sheet regulated under IFRS, fundamentally changes how financial assets are accounted for, including how instruments are classified and measured, and how they are impaired.

"While this regulatory change will provide high-quality accounting standards, it can be daunting, given its potential to impact all aspects of our clients' business," said Ivan Matviak, head of State Street Global Exchange North America. "PAM is a comprehensive, global accounting solution that enables clients to run their books under both IAS 39 and IFRS 9 and therefore to see results pre-and post-implementation, in parallel, one full year before compliance is required. We're pleased to offer it to our clients to help them more easily navigate this transition."

An IFRS 9 advisory committee comprised of the PAM platform's market leading client base and Product Management group, reviewed system requirements and design, and collaborated in bi-weekly demonstrations allowing for client input. This collaborative approach helped incorporate real-time feedback into the design and delivery of State Street's new platform, and a superior solution for accounting under IFRS 9.

"We welcomed the opportunity to participate in the Advisory Committee for the development of IFRS 9 functionality on PAM, as we believe client participation leads to an even better solution," said Matt McCoy, investment accounting manager, Transamerica Life Insurance Company. "Changes in regulatory standards can have significant impacts on business operations and the early collaboration among the Advisory Committee members was critical in developing the best possible platform."

Additional updates to PAM include:

Classification and Measurement

• Supports classifications under IFRS 9 and the behaviors associated with those classifications
• Tracks whether a security has Solely Payments of Principal and Interest (SPPI) and the Business Model of the portfolio in which the security is held, and assigns a security classification based on the information
• Provides an automated solution for transferring securities to their new IFRS 9 classification based on input from the user, and captures the accounting impact due to the change in classification

Impairments

• Allows users to record an impairment allowance against securities based on historical, current and forecasted information and recognizes impairment allowances at the time of purchase and at each reporting date to reflect changes in the credit risk of the financial asset
• Tracks securities through three possible stages of impairment and allows an impairment allowance to be recorded separately for each lot within the position
• Recognizes securities change in market valuation due to the accumulated impairment amount, the change in fair value and movements in foreign exchange rates, and accurately accounts for these changes in valuation according to IFRS 9
• Provides the reporting necessary to support the extensive footnote disclosures required for impairment securities

About State Street

State Street Corporation STT is one of the world's leading providers of financial services to institutional investors, including investment servicing, investment management and investment research and trading. With $27.78 trillion in assets under custody and administration and $2.3 trillion* in assets under management as of June 30, 2016, State Street operates in more than 100 geographic markets worldwide, including the US, Canada, Europe, the Middle East and Asia. For more information, visit State Street's website at www.statestreet.com.

* Assets under management were $2.30 trillion as of June 30, 2016. AUM reflects approx. $40 billion (as of June 30, 2016) with respect to which State Street Global Markets, LLC (SSGM) serves as marketing agent; SSGM and State Street Global Advisors are affiliated.

CORP-2127

View source version on businesswire.com: http://www.businesswire.com/news/home/20160802006499/en/