KONDOR+
AHEAD OF THE CURVE
CACEIS DELIVERS INNOVATION
AND TRUE STP
Case study
Ahead of the curve – Caceis delivers innovation and true STP
Caceis, one of the world’s largest providers of custodian and fund
management services to buy-side institutions, has implemented Misys
Kondor+ for the front-to-back integration of its wide range of complex
derivatives and structured products, customer valuations and pricing,
risk management and straight-through processing.
Innovation and service differentiation
Supporting structured products
As a global provider of custodian and fund
management services for asset managers, banks,
broker-dealers, and institutional and corporate
clients, Caceis operates in a highly competitive
market where new low-end fund administrators
enter the market in low-cost locations such as
Eastern Europe and Thailand. Caceis differentiates
itself through product and technical innovation and
its wide range of client services. At the same time,
by providing a common platform for many services
universal to financial institutions, Caceis enjoys
economies of scale while allowing its customers to
improve their operational efficiency by outsourcing
some of their business processes to Caceis.
With a three-month deadline imposed by one of
Caceis’ largest customers dealing with some 20,000
IR swaps per day, the custodian chose a technology
solution that could accommodate its immediate
valuation requirements and was able to support
Caceis’ long-term vision. With its customers
increasingly trading structured products and
one‑off instruments, Caceis then extended the
technology to provide greater flexibility for
instrument representation.
Cyrille Prigent, Head of Client Unit – Derivatives at
Caceis said, “We also expect regulatory demands
and risk management to have a greater significance.
In the past, clients demanded support for new
instruments and functionalities but after recent
global events, regulators are more active,
demanding more detailed information about fund
positions as well as more nuanced risk management
processes.”
Automated infrastructure
In 2007 Caceis embarked on a multi-year strategy
to meet its clients’ growing demand for innovation
at the same time as embracing global trends for
tighter regulation and risk management. To achieve
this, the custodian defined a vision for a fullyautomated and STP-enabled infrastructure
backbone, delivered incrementally through a
number of discrete projects, each giving tangible
benefits to Caceis’ customers.
The initial focus was on support for derivatives
pricing. Since 2006, fund managers using the
Caceis platform started to include more complex
derivatives in what had originally been relatively
vanilla portfolios and asked Caceis to support the
daily valuation of large portfolios of products
such as interest-rate (IR) swaps and credit default
swaps (CDS).
2
Case study
Having created a solid platform for the
representation of new products and the valuation
of non-traditional products, Caceis extended it by
rationalizing the downstream chain towards an STP
process encompassing the complete trade lifecycle,
from trade injection, valuation, and back-office
services, such as payments processing and
settlements, as well as risk management.
Key benefits
• Reduced risk – capturing all derivatives
trades in a single system significantly reduces
manual processing, errors and exceptions,
resulting in better controls and risk
management
• Uniform valuations – a common platform
ensures consistent valuations across portfolios
• Better payment processing – the STP
capabilities of Kondor+ result in faster
payments and settlement for customers and
reduced costs for Caceis
• Automation and instrument coverage –
the platform can be extended easily to
support new instruments, irrespective of
their complexity
Ahead of the curve – Caceis delivers innovation and true STP
Front-to-back integration with Misys
2011 and beyond
The common technical backbone supporting the
delivery of Caceis’ innovative and sophisticated
services was provided by Misys, standardized
around Kondor+ for front-to-back trade and
risk management.
Caceis intends to add more of its business units
and their corresponding instruments to Kondor+
backbone, with fixed income added recently and
equity swaps, involving more than 60,000 trades per
day, expected to be added soon. Kondor+ is also
expected to be a strategic part of the custodian’s
plans to give customers access to trading room
cash management products and securities lending,
trade matching, and market and credit risk.
Kondor+ is used as the core system to capture and
value derivative trades with its structured products
module supporting more complex derivatives and
one-off instruments. Prigent said, “The structured
products module includes a graphical designer
application that allows us to define new financial
instruments on the fly and to associate them with
any number of pricing libraries. Completely
integrated with Kondor+ processes for valuations
and reporting, the module is an excellent tool for
delivering the quick injection of new products that
our customers demand.”
Prigent concluded, “Kondor+ has given Caceis
a platform on which to evolve and automate our
business model while allowing the underlying
infrastructure to be rationalized and made more
efficient. Virtually all new products are now
managed in Kondor+.”
About Caceis
Widespread STP
Caceis is also using Kondor+ back-office module
to support its back-office processes, including a
customizable, rules-based workflow engine and
detailed audit trails, as well as integration with
the custodian’s accounting systems and external
gateways such as SwiftNET. Eric Bichel, Head of IT
for Kondor+, Dealing Room & Reconciliation
Brokers at Caceis, explained, “This greatly simplifies
our processes. For example, we now process 80 per
cent of our fixed-income business via STP thanks to
Kondor+.”
Furthermore, as the foundation of the custodian’s
operations, Kondor+ has been integrated with
a number of standalone systems, such as credit and
market risk, to reuse existing tools and functionality
but within the consistent framework provided
by Kondor+.
Bichel added, “Robustness and scalability were also
important to us. We performed internal tests on
Kondor+ and it performed well. We are now looking
at our downstream systems as part of a joint project
with Misys.”
Caceis is a global provider of custodian and
fund management services for buy-side
institutions. Its depository/trustee custody
business has over €2.3 trillion in assets, and
its fund administration looks after €1.1 trillion
in assets. Based in Luxembourg with 13 offices
worldwide and over 3,500 employees,
Caceis is one of the leaders in the custodian/
fund servicing industry rankings, being no.1
in Europe and no.6 worldwide for fund
administration, and no.4 in Europe and
no.10 worldwide in custody services.
“Kondor+ has given Caceis a
platform on which to evolve and
automate our business model
while allowing the underlying
infrastructure to be rationalized
and made more efficient. Almost
all new Caceis products are now
managed in Kondor+”
Cyrille Prigent
Head of Client Unit – Derivatives, Caceis
Case study
3
MISYS RECENT MARKET RECOGNITION
NUMBER ONE TRADING SYSTEM
TECHNOLOGY PROVIDER
STRUCTURED PRODUCTS
TECHNOLOGY RANKINGS 2012
RISK TECHNOLOGY RANKINGS 2011
Number One Trading System – Credit
Number One Trading System – Cross Asset
Number One Trading System – Foreign Exchange
Number One Trading System – Rates
Number One Risk Management – Collateral Management
Number One Overall Trading System
Number One Pricing and Analytics – Equity
Number One Pricing and Analytics – Inflation
NUMBER ONE RISK MANAGEMENT
TECHNOLOGY PROVIDER
BEST TRADING PLATFORM BACK OFFICE
ASIAN BANKER TECHNOLOGY AWARDS
ASIA RISK TECHNOLOGY RANKINGS 2011
Number One Overall Risk Management
Number One Trading System – Equities
Number One Trading System – Foreign exchange
Number One Trading System – Interest rates
Number One Derivatives pricing and risk analytics – Equities
Number One Derivatives pricing and risk analytics – Interest rates
Number One Derivatives pricing and risk analytics – Hybrids
Number One Support services – Implementation efficiency
LEADING SINGLE TECHNOLOGY
PLATFORM – PORTFOLIO, TRADING
AND RISK MANAGEMENT
HEDGE FUND JOURNAL AWARDS 2011
STRUCTURED PRODUCTS
TECHNOLOGY RANKINGS 2011
Number One Trading System – Equities
Number One Trading System – Interest rates
Number One Pricing and Analytics – Equities
BEST RISK MANAGEMENT INITIATIVE
ASIA ASSET MANAGEMENT AWARDS
ABOUT MISYS
Misys is at the forefront of the financial software
industry, providing the broadest portfolio of
banking, treasury, trading and risk solutions available
on the market. With 1,800 customers in 120
countries our team of domain experts and partners
have an unparalleled ability to address industry
requirements at both a global and local level.
Misys was formed by the merger of Misys with
Turaz, which includes the award-winning Kondor+
product line. Combined they are able to address
all customer requirements across both the banking
and trading book businesses. Misys is the trusted
partner that financial services organisations turn to
for help solving their most complex problems.
Misys and the Misys “globe” mark are trade marks of the Misys group
companies. Copyright© 2012 Misys. All rights reserved.
Find out more at www.misys.com
48002268