Middle/Back Office Assessment & Transformation

Proprietary trading entity (non-broker dealer)
150 traders with approximately 800 accounts spread over a handful of credit counterparties.

Challenges

The current environment was built from legacy systems, processes, vendors and service providers. As the firm has grown in complexity the infrastructure has not kept pace.
Credit counterparties (Prime Brokers in particular) are having difficulty digesting the daily trade flow without manual effort; especially when there are special situations, deals, trade breaks or corporate actions.
Credit counterparties concerned of the inherent operational risks imbedded in the current modus operandi, are hesitant to have their market share grow because of it.
Internally, P&L for each trader is available on a nightly basis, but many processes are still “high touch” and require effort by operations to clean up.

Provided a complete operations assessment of front, middle and back office
Performed a cross-functional review of the current state by product with the identification of key gaps and recommendations that impacted people, processes, and technology.
All control areas reviewed: trade management, clearance & settlement, asset servicing, operations control, compliance, accounting & finance, securities lending & borrowing, treasury management, technology & systems and service providers.
The review of service providers included Administrators, Prime Brokers, OTC credit providers, repo counterparties, custody banks, technology workflow and trading vendors.

Transformed back office to represent industry-standard controls and protocols
Successfully recruited for the head of operations
Created the first stage of the middle office which included analytics for margin, liquidity, cash & collateral management, securities borrowing and counterparty credit risk.