Efficient and effective investment can change your corporate treasury department
by Jack Large
So your analysis shows that you have some surplus liquidity for a few days, weeks or months to invest? But what do you do with it? Most companies have a set number of institutions, often agreed at board level, that they can invest it with and other limits such exposures to any one organisation. Then you need an investment platform that:
- has direct efficient and easy access to all your approved funds and investment vehicles
- manages the compliance with all the limits and other restrictions
- provides risk management tools and facilities
- makes it easy and efficient to carry out and manage the actual deal ranging from setting up the investment, making the investment payment and receiving the returned funds.
This has been the standard set of requirements for investment platforms for many years. What differentiates the solutions is their focus, coverage and efficiency.
Institutional Cash Distributors, the world’s largest independent institutional investment and risk management solution, was founded in 2003 and is now majority-owned by Parthenon Capital Partners. ICD is integrated directly over 300 money market funds and other Financial Institution providers providing a wide selection of investment products, including:
- Money Market Funds
- Short Duration Bond Funds
- Federally Insured Cash Account (FICA)
- Federally Insured Brokered CDs
- Separately Managed Accounts
- Time Deposits through a partnership with 360T.
ICD has Global Trade Desks in San Francisco, Boston and London which provide over 17 hours of support each business day.
Bringing it altogether
ICD Portal has been integrated with all the major treasury management systems. It provides a secure trading platform developed with an open architecture that enables ICD to integrate with all treasury management and ERP systems, clearing and custody firms, transfer agents, fund companies, data providers, electronic trading platforms, analytics applications and banks, as shown below:
Source & Copyright©2019 - ICD
The integration of the ICD Portal and the TMS can save significant time each day. One ICD client found that after implementing such a solution that they reduced the trading time required by 3.5 hours each day:
Source & Copyright©2019 - ICD
They also found the enhanced quality of their reporting as well as reducing errors.
Secure trade settlement
ICD has developed AutoPay, it's patented automated settlement system that enables clients to enter purchases on the ICD Portal and simultaneously authorize a secure wire settlement disbursement from the client’s bank which employs ICD’s TrueMark Encapsulated Security Tokens (ESTs) which provide multi-layer protection against unauthorized transmissions or human error.
Reporting and risk management
An essential feature of an investment portal is comprehensive reporting and full risk management, so users can really understand what is happening and manage their risks. ICD have recently upgraded their reporting and risk management system service, Transparency Plus 7.0, which provides:
- portfolio exposure to counterparties, countries, sectors, security types and more
- direct import of your exposures
- ability to configure reports
so users can be sure of that they can keep within their exposure limits and manage their liquidity effectively.
The account onboarding team works to pre-fill any required documents for the clients and, as a web-hosted company, clients are able to get access to the portal in a few days.
ICD Portal and its services are available to clients at no cost. Any and all costs for operating the portal and its services are borne by ICD. ICD is paid through the management fees already charged by fund companies.
Future development in demand and services
A recent ICD survey of 141 clients globally found that corporates plan on increasing or maintaining money market fund investments in 2019:
- 88% of investors plan on increasing or maintaining their current level of investment in Money Market Funds (MMFs), indicating a minimal impact on MMF investment post US and EU money fund reform
- other short-term investments:
- 23% indicated they are invested in or plan on investing in Short Duration Bond Funds
- 56% in Time Deposits
- 11% in ETFs
- in the United States, 64% of respondents are investing in or plan on investing in Prime Funds in 2019, an increase of 4% over 2018.
CTMfile take: Having an efficient and effective platform for investing and managing liquidity which links to other trading platforms is essential for large corporate treasury departments today. It is a ‘must-have’. ICD ticks all the boxes, no wonder they had 20% new client growth and 99.6% client retention last year.
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