Sep 28, 2022


Our client is a component of one of the world’s leading global financial organizations with its own assets under management of over USD 130 billion. The firm offers a wide range of single-country, regional, and global capabilities across public and private equity, fixed income, and commercial real estate, delivered through a diverse set of investment vehicles ─ i.e., retail funds, institutional accounts, ETFs, UCITs, and SCAVs.​

The firm’s expanded use of derivatives in its European market product offerings, as well as the requirements under FINRA Rule 4210 ─ collateralization of TBA agreements ─ have increased its operational complexity.​

The firm was seeking a collateral solution that would had the following:​

  • Vendor-built, supported, and hosted​
  • Scales with trading volumes​
  • Cost- and resource-efficient​

Cutter Associates was engaged by the chief administrative officer to evaluate and validate the firm’s initial vendor selection, provide derivative subject matter expertise, and lead the project and implementation of a collateral management solution.

Cutter Solution

Cutter partnered with the key business and technology stakeholders of the portfolio management, operations, legal, and technology teams to perform the following:​

  • Vetting the client’s selection for capability, compatibility, and value​
  • Providing derivatives and collateral management subject matter and industry-leading practices expertise​
  • Evaluating the firm’s current skills set and resource capacity, identifying gaps, then working with management, devising actionable strategies to address those gaps​
  • Acting as both project manager and project leader​
  • Identifying and addressing tangential process improvement opportunities ​

​Cutter’s in-depth knowledge of derivatives and collateral management, as well as its breadth of vendor application implementation experience, played a significant role in ensuring a successful solution that exceeded the stakeholders’ requirements.​

As a result of this project the client achieved many benefits, including the following:​

  • A solution that utilized existing staff resources ─ i.e., no additions to either operations or IT support staff required​
  • A scalable solution that accommodates both trading volumes and product variety​
  • More transparent derivatives and collateral reporting​
  • Increased skill set of staff​