BNP Paribas Securities Services has partnered with Northcape Capital to launch an automated foreign exchange (FX) solution to provide the latter with a new system for asset managers to manage FX transactions with multiple financial services providers.
Boutique Australian fund manager Northcape appointed BNP Paribas to manage the FX execution of several developed market currencies across its middle-office client portfolio as an extension of BNP Paribas’ existing portfolio administration and custody mandate.
In response, BNP Paribas expanded both its middle-office FX solution (MOFX) to Asia Pacific clients and proprietary FX service for custody clients.
MOFX is designed to simplify FX transactions for asset managers dealing with several custodian banks, which means they have to manage different protocols, timings and rates.
The solution allows asset managers to execute FX transactions earlier in the trade lifecycle at the middle-office level rather than custody level, which facilitates optimal control and reporting.
Marie Charlotte Schmit, global head of client management, FX and passive currency overlay, BNP Paribas Securities Services, explains: “Northcape was seeking a fully integrated FX solution that would allow for ease of settlement for their funds and mandates held with several different custodians.”
“In response, we expanded the MOFX model, a key innovation in AutoFX, which provides optimised, harmonised, transparent execution coupled with competitive FX rates and settlement across different global custodians.”
Schmit continues: “This fully automated FX solution allows the asset manager to focus on their investment strategy, knowing their FX needs and requirements are automatically taken care of. FX plays a key role in executing successful trades and, as such, we are already seeing significant appetite among our buy-side clients for this new solution.”
Sean Cunningham, head of investment operations at Northcape Capital, adds: “Our focus was on ensuring we were providing the best result for our clients. The efficiencies realised with this new operational infrastructure saw a reduction in FX execution lag and an added degree of transparency in the granularity of transactional data received.”
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