In this episode, SBAI’s Brian Digney is joined by Leda Braga, Chief Executive Officer of Systematica Investments, and Ben Dixon, the firm’s General Counsel and Chief Compliance Officer. Together, they explore one of the least understood but most consequential parts of operational risk: how investment managers define, manage and report trade errors.
Leda reflects on the evolution of transparency expectations since the early 2000s, the institutionalisation of the hedge fund industry, and the growing weight of regulatory disclosure. She also discusses the role of voluntary standards, how the SBAI creates a unique forum for allocators and managers, and why cultural alignment matters as much as process.
Ben explains how Systematica approaches error identification, near-misses and operational robustness through a no-blame, firm-wide culture. He highlights how inconsistent definitions across the industry make comparisons difficult, why many managers fear admitting errors, and how clearer frameworks can support better outcomes for both regulators and investors.
Key takeaways include:
• Transparency around errors varies widely, and without consistent definitions, data between managers is often not comparable.
• A no-blame culture supported by senior leadership helps firms identify and learn from mistakes before they escalate.
• Excessive fear of liability or regulatory consequences can discourage managers from open disclosure, even when doing so would improve investor trust.
• Voluntary standards, such as those developed by the SBAI, can help bridge gaps between allocators and managers by clarifying expectations and reducing conflicts of interest.
• Balancing who bears the cost of trade errors requires careful consideration of materiality thresholds, observation periods and insurance.
Whether you are an allocator assessing operational resilience or a manager designing internal controls, this episode offers a detailed and grounded discussion of the culture and systems behind responsible investment management.
About the SBAI:
We are an active alliance of asset managers and allocators dedicated to responsible practice, partnership, and knowledge. We do this by setting Standards, providing industry guidance, and facilitating collaboration and exchange of ideas through our community of over 250 institutional investors and asset manager signatories responsible for approximately US$ 11 trillion in assets.
For more information, visit https://www.sbai.org/