ACI FINANCIAL

MARKETS
TREASURY
BACK OFFICE

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 Treasury
Function Responsible for
Front office Dealing ,
Customer Relationship
Management
Middle Office Risk management,
accounting, research and
management information

Back office Confirmations, deal

processing, settlement and
reconciliation, reporting
 Front office
• generate bank revenue and clients profit.
i. Traders, brokers, asset managers, researchers, and sales and
structuring professionals are the key players of the front
office line up.
• Characteristics
• High pressure
• decisions pressure (short time frames could either make or lose
huge amounts of money).
• Long working hours. 80-hour weeks are not uncommon!
• These roles generally have the highest salaries in investment
banking – indeed

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 Middle office
• In investment banking - risk management, research and compliance
departments, elements of technology.
i. Risk analysts and managers – advise on various asset classes and financial
markets for decision making in investment risks taking.
ii. manage risk in terms of compliance (regulatory and industry standards)
iii. Comprises of a legal team
iv. Financial control
v. Developers and some types of quantitative analysts work on the creation and
maintenance of software (used by the traders and brokers)
vi. preparing financial statements for reporting to industry regulators etc.
• Characteristics
i. making sure the bank doesn’t breach regulations and put its financial
position and reputation at stake.
ii. to convince front office not to get carried away with risky investment, whilst
giving them the room to make the most lucrative moves they can.
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 Back office skills
• are administrative-based skills.
i. data management and entry;
ii. projects and claims processing;
iii. market trends and behaviour analysis;
iv. market research;
v. finance and accounting responsibilities.
vi. information technology (IT)
vii. human resources.

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 Back office characteristics
 More standard office hours compared to the front office.
 An international dynamic.
 Multinational investment banks often unite their operations teams
across the globe to get tasks done and problems solved as quickly as
possible.
 Assist and support administrative staff in their day to day
operations.
 Assist and coordinate with sales and marketing teams.
 Conduct marketing research, document and report to the marketing
department.
 Support sales staff in handling and documenting customer accounts.
 Perform competitor product analysis and prepare reports
 Prepare and reconcile customer balances
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 REPORTING
• Method and timely reporting:
i. Daily settlement reports
ii. Cash flow reports
iii. Bank account balances from all sources
iv. Exposure reports
v. Limit reports
vi. Profit and loss
 OPERATIONAL REPORTS
• Exception reports are provided to senior
management and the Board
i. policy breaches reports
ii. Management reports
iii. Board reports
iv. “Stress testing” and scenario forecasts reports
v. Treasury policy review reports
Category
Treasury reports
Report type Frequency
Forecasts to identify Cash flow forecast
situations i. Long term cash flow i. As required
ii. 12 and 3 month rolling cash flow ii. Monthly & weekly
forecast
iii. Daily cash positions estimate iii. Daily
iv. Treasury plan iv. quarterly

Frameworks to list and Options list for:

evaluate i. Short term investments
ii. Short term financing As required
iii. Hedging techniques
Worksheet to evaluate alternatives
iv. Short term investments
v. Short term financing
vi. Hedging techniques

Reports to record Summary of reports:

monitor & control Investing cash
activities i. Daily investment summary i. Daily
ii. Monthly investment report ii. monthly

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 Treasury reports cont’d
Category Report type Frequency
Reports to Funding cash requirements
record, monitor i. Daily funding summary i. Daily
and control ii. Monthly funding report ii. Monthly
activities Foreign exchange transactions
iii. Daily foreign exchange summary iii. Daily
iv. Monthly foreign exchange report iv. Monthly
Exposure management
v. Daily forward exchange contract v. Daily
summary
vi. Monthly forward contract summary ii. Monthly
vii. Internal hedging report iii. Quarterly
Counterparty analysis
viii. Counterparty business analysis iv. Quarterly
ix. Transaction confirmations v. As required

Exception Exception reports for:

reports i. Short term investments
ii. Short term financing As required
iii. Foreign exchange transactions
iv. Hedging transactions
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