Asset Manager collateral strategy and vendor selection

Client context

This $150bn AUM asset manager uses FX and interest rate swaps to hedge exposures in their own and third party managed funds domiciled in US, Europe and Asia. Their collateral operation is based on email, spreadsheets and manual operations, adequate for today’s world but unacceptable in the face of Dodd Frank and EMIR requirements for trade reporting and mandatory clearing of OTC derivatives.

Project scope

• Strategic roadmap: Our consultant conducted an intense set of workshops with stakeholders from OTC and FX trading, fund management, operations, IT and compliance to lay out the regulatory impacts and design a three year timeline of strategic initiatives required, including a short term plan for Dodd Frank trade reporting compliance
• EMIR trade reporting strategy: we later guided the firm into choosing and implementing a European trade reporting solution
• Collateral target operating model: we developed a detailed collateral operating model identifying critical business functions, processes and controls
• Collateral vendor selection: We developed detailed functional and non-functional requirements and provided a long list and short list of collateral technology vendors and collateral service providers to support the firm’s evaluation of strategic platform.

Benefits

The client was able to access the deep clearing and collateral subject matter expertise and service provider / vendor knowledge they lacked, enabling secure low risk strategic choices to be made quickly and securely.