FTI Managed Treasury

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Managed Treasury Solutions,

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FTI Managed Treasury

  1. 1. Outsourced or‘Managed’ Treasury © FTI. Reproduction Prohibited
  2. 2. FTI Business Areas Managed Treasury Treasury Systems Solutions Technology- TreasuryBased Treasury Consulting Training © FTI. Reproduction Prohibited
  3. 3. Managed Treasury can be..• Temporary o To facilitate a fast treasury start-up o To facilitate a business disposal• Long Term o To buy into an established treasury facility/operation• Very specific o A Special Purpose Vehicle for eg a specific financing• Core Treasury o Covering FO/MO/BO o Seamless with In-House• Business Based or Tax Based• Can be legal entity/treasury centre or integrated with HOIn Summary:• Always Customised• Treasury is never 100% Outsourced © FTI. Reproduction Prohibited
  4. 4. Managed Treasury -Scope• Cash & Liquidity Management• Surplus Cash Investment• Inter-Company Financing/ In House bank accounts• External Financing• Risk Management • Foreign currency • Interest rate risk • Counterparty and credit risk• Nettingo Strategy development and advisory support © FTI. Reproduction Prohibited
  5. 5. FO/BO/MO Components Mid Office Front Office Back Office• Counterparties • Liaise with • Confirmations Limits ‘HO’ Treasury • Settlements• Permitted • Position • Reconciliations Contracts Management• Rates/Yield • Dealing & Curves Transactions• SSIs• Accounting © FTI. Reproduction Prohibited
  6. 6. Control Process Segregation Segregation Mid Office Confirm & Deal Control Settle Auditors/Regulators/Compliance require strong controls © FTI. Reproduction Prohibited
  7. 7. The Key Role for ‘Mid Office’ • Systems Static Data o It’s not just about data! • User Profiles/Access/Passwords • Limit monitoring • Mark to market valuations – why? • Hedge accounting & effectiveness testing • Analyses/Reporting • Accounting Rules • Bank Mandates © FTI. Reproduction Prohibited
  8. 8. Front Office Activity• Position/Exposure Management• Policy & strategy implementation• Dealing/Transaction execution• Transaction recording• Cash & liquidity management• FO Reporting © FTI. Reproduction Prohibited
  9. 9. Back Office Services • Independent Checking • Confirmations [before settlement] • Settlement o Cut off times o Standard settlement instructions o Authorisation • Reconciliation o Daily o Query resolution o Bank interest & charges © FTI. Reproduction Prohibited
  10. 10. Corporate Services Board Director Company secretary Secretarial and administration services Regulatory and statutory compliance Treasury governance, policy, procedures & control framework © FTI. Reproduction Prohibited
  11. 11. System Integration/Embedded Controls Reuters Bloomberg Banking /EB TMS Accounting Payments e.g. Swift © FTI. Reproduction Prohibited
  12. 12. Straight Through Processing (STP)means …. A complete business process Based on once-only input of data Deal Confirm Report Settle Manage Accounting © FTI. Reproduction Prohibited
  13. 13. Managed Treasury Control Framework Client Control Client policy Approves processes Approves budgets FTI Authority Regulation Retains all decisions Limited authority FTI regulated by Irish Central Bank Bank mandates FTI subject to MiFID No funds in FTI’s name FTI Treasury ‘Best No credit exposure to Practice’ FTI Review Controls Statutory Audit Embedded Controls Regulatory Infrastructure – Client internal and systems & processes external audit Personnel – team Internal review and allocation assessment FTI Personnel Processes Director level Proven processes Corporate treasury Independent checks & focus controls Expertise and Subject to due Systems knowledge diligence & audit Independent Experience & proven administration track record Security protocols Business continuity © FTI. Reproduction Prohibited
  14. 14. Managed Treasury - Benefits• Access an established treasury – controls, systems, methodology, procedures & controls, reporting etc• Lower costs – economies of scale• Access to a deeper pool of experience and expertise• An immediate solution - a fully operational treasury quickly on stream• Treasury is high cost and a Treasury Centre may not justify a standalone cost• In-house treasury can focus more on the strategic, less on operational• A ‘Managed Treasury’ – probably stronger controls than ‘in-house’• Flexbility to downsize © FTI. Reproduction Prohibited

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