caceis.com, new version

( products and services
David Baert
Head of Control
Matching and PreSettlement
and Françoise Seive,
Head of OTC Derivatives
no. 13 - march 2008
oTc derivatives, a single partner
To minimise asset managers’ costs
and operational risks, CACEIS offers
a comprehensive and flexible
outsourced solution for processing
and valuing oTC derivatives.
rApID GroWTH In oTC DErIVATIVES
CACEIS’ service involves high-level expertise in
operational flows, regulations and risks, and the
sophistication of OTC derivatives means that dedicated
teams and systems are used. The increasing
number of complex instruments and entities involved
in OTC derivatives (brokers, prime brokers,
banks), along with strict regulations, are prompting
asset managers to deploy large-scale human
and technological resources. OTC derivatives
are becoming increasingly important in asset
management in general, particularly in institutional
portfolios.
There are a wide range of products available to
help investors meet hedging targets and boosting
the performance of their portfolios. The development
of the OTC derivatives market is confirmed
by the three-year worldwide survey co-ordinated
by the Bank of International Settlements (BIS),
published in late June 2007. Total amounts outstanding
on OTC derivatives doubled from around
products handled
$33,000 bn at end-June 2004 to more than $65,000
bn at end-June 2007.
DEDICATED TEAmS
CACEIS has experienced teams, focused on processing
OTC derivatives. These teams consist of
professionals who developed their skills through
day-to-day monitoring of activities at large asset
management companies. They can easily handle
complex instruments and aim to process them with
the same fluidity as simple instruments. Specialists
enter trading instructions directly into the systems
via proprietary-format files for simple OTC derivatives,
while complex derivatives require special
parameter-setting.
SuITED TECHnoLoGICAL mEAnS
CACEIS provides a highly secure modular solu-
tion that includes real-time integration into its fund
administration and custody systems. The mar-
ket-leading Kondor+ software package is used
at Luxembourg and will be gradually spread out
to Paris. It enhances their ability to process large
volumes while at the same time keeping a firm grip
on risks. The combination of our skilled specialist
staff and our high-performance software allows
us to monitor complex derivatives activity, and to
keep pace with new product developments.
The service covers all OTC derivatives transactions, with interest rate, equity, credit and
forex underlyings.
Standard transactions: Vanilla and non-vanilla swaps; Currency swaps; Inflation swaps
(HICP); Caps and floors; FRAs; Asset swaps (only the swap component); Non-vanilla
currency swaps; Non-vanilla cross-currency asset swaps; Swaptions; Forex options; Credit
derivatives: single name CDSs, credit indexes (ITRAXX and CDX), tranches of credit indexes,
basket default swaps, ITRAXX and CDX options etc.
Complex transactions: Equity swaps: performance swaps on equities, on baskets of
equities, on stockmarket indexes, on baskets of stockmarket indexes;
Total return swaps;
Equity options, index options, bond options;
Structured interest-rate and currency swaps: barrier interest-rate swaps, dividend swaps;
Volatility swaps: equities, stockmarket indexes, forex;
Variance swaps: share price, stockmarket index level, exchange rate;
Correlation swaps: share price, exchange rate, stockmarket index level; Options on spreads
between indexes; Exotic cap/floors: knock-in caps/floors, knock-out caps/floors; CFDs.
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