Outsourcing treasury operations

Treasury Management ensured a seamless changeover of business service provider. Our client now focuses on business issues such as working with business units, mergers and acquisitions while our team deals with daily transaction management under defined policies.

  • Full set-up of front- to back-office services including technology platforms
  • Fast, punctual changeover of operations within five months after initial contact
  • Uninterrupted services
  • Improved visibility and direct access to systems and transactions
  • Strategic benefits of outsourcing preserved

When an international business was facing the challenge of finding a new harbor for its outsourced corporate treasury activities, Treasury Management assisted in this changeover and was chosen as the new service provider.

The project scope was a full front- to back-office assignment including the set-up of a bespoke system platform to suit the needs of a truly international organization. With a five months’ timetable and a hand-over presentation from the previous service provider, Treasury Management assumed project responsibility to re-establish a robust treasury routine with system infrastructure and internal controls as well as acquiring the conceptual knowledge about the client’s treasury objectives. Interfaces, licenses and additional products were obtained while agreeing upon the framework for policy and guidelines.

We assisted with advice on systems and processes alongside the actual implementation of these tools and routines. The transformation was accelerated by the client’s in-depth knowledge of supervising an outsourced activity and, in this respect, static data, transactional information together with other procedures could be communicated to us in a structured way. Since the go-live date was halfway into the reporting year we also established historical data to provide a full reporting period.

At the defined transition date, Treasury Management commenced managed services that covered an all-embracing launch of services and technology including inter-company debt and investment management, foreign exchange management, cash and liquidity management, cash pool management, bank reconciliations, accounting and reporting.

The client shifted transactional operations without interruption and benefited immediately from a greater transparency of services via the direct system access allowed by our solution. The technical platform was not only more accessible but also more cost efficient.

Our partnership approach enabled quick, continuous sharing of knowledge so that all objectives of the outsourcing assignment could be met at set-up, at launch, and for long-term management.

We continue to work closely with the in-house treasury centers, sharing daily information on the needs and requests from their affiliated companies and also contributing with advice and execution of ‘on behalf of’ transactions for the locations that cannot immediately deal with the in-house bank.

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Regulatory reporting of derivatives

Emir reporting – Keep it simple and automate the process where possible

The “necessary evil” of most regulatory reporting create an added cost and -administration for the Corporate Treasury function. For our clients we have two main scenarios under Emir, where the central treasury entity (the in-house bank) assists the business Group with all reporting;

  • an in-house bank within EU, reporting its external derivatives to a trade repository (TR)
  • an in-house bank outside EU, reporting internal derivatives on-behalf of its affiliates to a TR

The advantage for our clients has been a quick set-up at a competitive low cost,
read more below;

Registration, categorization, documentation

We have signed up directly with a TR as reporting entity. The TR also provides the needed LEIs (Legal entity identifiers in a bulk registration).
Versus the banks the in-house bank has adhered to the ISDA protocol for portfolio reconciliation, dispute resolution and disclosure (via internet registration) and also informed the counterpart of the NFC category (e.g. non-financial company). It is a clear benefit to keep correspondence with the banks, as well as the related registrations/documentation, centrally managed.

System set-up

The TMS-tool was updated with Emir-reporting functionality, e.g. with static data fields for instruments, counterparts, etcetera according to the Emir standards. The UTI (unique trade identifiers) are agreed to be those of 360T (our multibank trading platform) or, for internal deals, those automatically generated by the TMS.

Reporting

Daily reports are produced in a format that can be directly uploaded to the TR. We met the ESMA February 12 reporting deadline for outstanding trades and are reporting the new trades as an end-of-day process for our back-office function

Reconciliation

Depending on the NFC category, quarterly or annual reconciliation of outstanding deals is made. Our back office receives the banks’ report by email. Controls the data (that via the normal confirmation matching process already should be confirmed and accurate), reviews the banks’ mark-to-market values (however, briefly – since it at all times is our internal MtM-valuation that reigns and determines the unrealized values e.g. for accounting purposes). This process of reconciliation is of course not different from the normal review of month-end valuation statements received from the external banks.


In summary

We have kept the process simple as the reporting to the TR is standardized and automated. Also no new systems (or middle-ware) are introduced, but all is managed via the normal deal input/reporting in the TMS.


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