ClavisAsset implementation at Fondul Proprietatea Case Study

ClavisAsset implementation at Fondul Proprietatea Case Study

Globally, Franklin Templeton manages a capital of over 560 billion dollars. Fondul Proprietatea took first place among the most traded securities with a share of 46% in 2012 over 5 times more than the second place.

Founded in 2005, Fondul Proprietatea is the largest investment fund in Romania and since 2010 is administered by Franklin Templeton. Globally, Franklin Templeton manages a capital of over 560 billion dollars. Fondul Proprietatea was listed on the Bucharest Stock Exchange in January 2012 and took first place among the most traded securities with a share of 46% in 2012 over 5 times more than the second place.

In order to fulfill its business, integration and legal needs, Fondul Proprietatea has chosen the ClavisAsset solution that was implemented by Dorsum. ClavisAsset is designed to serve the activities of asset management companies, the information needs for investment decision and the back-office deal settlements, it has a flexible architecture, that was easily integrated with the existing infrastructure.

Dorsum Group has its headquarters in Hungary and has subsidiaries in Romania and Hungary. Within Hungary we can count the largest banks and investment companies, more than one third of the treasuries, and two market leading insurance companies amongst our satisfied clients. Clavis systems have been implemented in more than twenty companies within Romania and Bulgaria.

One of the main strengths of ClavisAsset is that it was adapted to the local market, satisfying mandatory legal reporting requirements. ClavisAsset can be used simultaneously by users from different countries as it is a multi-language application.

The implementation of ClavisAsset at Fondul Proprietatea benefited from the experience of the Dorsum Romania local team that was complemented by the Dorsum Hungary and Dorsum Bulgaria international team.

With attributes as robustness, high availability and flexibility, ClavisAsset was integrated with the accounting solution selected by Fondul Proprietatea and with the Franklin Templeton Front Office application.

The ClavisAsset system provides sophisticated permission levels and supports a single-sign-on mechanism controlled via Windows Active Directory.

The 10 month implementation involved team members and resources from all over the world,: the project sponsors were located in Belgium, the client project manager was in UK, the key users were located in Romania, IT team was in USA, DB support in India, the UAT servers in Dublin, the Production servers in Edinburgh, while the Dorsum implementation team was composed of members from Romania, Hungary and Bulgaria.

The flexibility of all parties led to a fluent change management process in spite of the changes of the specifications during implementation.

Another challenge that was surpassed consisted in the integration with the accounting application and with the Front Office application.

ClavisAsset offers flexible import/export procedures for the integration with any Front Office application. At Fondul Proprietatea, ClavisAsset was integrated with the Franklin Templeton’s Front Office system. The workflow is carefully managed through Day Opening tasks and ensures the transfer of the following information:

  • Partner base data
  • Security base data
  • Currencies base data
  • Coupons base data
  • Trades

The purpose of ClavisAsset system is to serve the activity of asset management companies, the information needs for investment decisions and the settlement of the deals in backoffice.

General Clavis features:

  • Settlements in BackOffice module
  • File-based communication with other custody and BackOffice applications
  • Base data of managed funds and other portfolios, and their partners
  • Base data of investment units, shares, bonds with the expirations related to them
  • Stock pairing and valuation (FIFO, weight average price) with pre-matching
  • Interest and profit tax calculation in accordance with the local laws
  • Printing standard and user-specific reports
  • Importing prices, historical and daily price registration
  • Importing deals from external systems
  • Legal Reporting to regulators and central bank
  • Client specific Reporting to depository and other partners
  • Exporting reports to Excel, PDF
  • Booking and export entries to General Ledger (ClavisBook, SA, …etc.)
  • IFRS / IAS compliant
  • Day-opening and day-closing tasks

 

Delivered functionality

1. Language

Clavis supports Romanian and English at the same time. The same user can access the application by changing the language at logon time or even afterwards. The same report can show language-dependent text according to the language chosen as the interface for Clavis (one user can see the report with Romanian text while another – with English text).

2. User access

The system supports a single sign on controlled via Windows Active Directory. Clavis provides sophisticated permission levels, offering the possibility to create user roles/user groups with certain responsibility levels, and available functionalities. The matrix is based on the belonging of each user to one or more groups, and these groups have their own permissions set. This way the users can have read-write rights on some modules and read-only rights on other modules. The permission groups are managed in Clavis.

3. Import / export

Clavis can easily handle file import and manual input processes. No matter the import functionality, all of the processes also support manual input by providing user interface to the Clavis users.
Clavis provides customizable import file feeds and can parse delimited data content like .csv, .txt., .xls, and also sparse data where required to do so.

4. Base Data

Clavis Asset manages the base data of funds, other portfolios, their partners as well as the base data of investment units, shares, bonds with the expirations related to them.

5. Currencies

Clavis stores several currencies and allows to each portfolio to be setup with the desired currency. Also, currency may be user chosen at many levels (transactions, instrument base data, etc.).

Each transaction can have its own currency and it can even have multiple currencies set where it involves, for example, settlement in another currency than the instrument’s trade currency. Clavis is multi-currency and all assets are evaluated simultaneously in their trade currency but also in the portfolio’s currency.

Also, additional currency code and amount per transaction and rate exchange table are available with the account module. Clavis has a table dedicated to currency information storage. The table can easily accommodate new currencies and their relevant properties. All modules of Clavis reference the content of this table, when questioning about available currencies’ information.

6. Financial Instruments

Clavis has many years since it has been adapted to the Romanian legislation and is capable of providing the tracking and evaluation of the following asset classes (financial instruments).

  • Listed Shares (on local or foreign markets)
  • Unlisted Shares
  • Corporate Bonds
  • Municipality Bonds
  • Government securities (Treasury bond, Treasury bills, with discount or with coupon)
  • Bank Deposits
  • Current Accounts
  • Derivatives (Futures, Forwards, Options, SWAPs)
  • Open end and closed end investment funds units/shares (AOPC and/or OPCVM) listed or unlisted
  • Subscription rights

7. Transactions

The pre-defined transaction types which include: acquisitions, disposals, bonus issues, in kind contributions to the share capital of the Fund-shares – Romanian State contributions (for shares), mergers (between companies in Fund’s portfolio (for shares), share split (for shares), deposit creation, buybacks (acquisitions of Fund’s own shares) etc.

The transaction engine is highly customizable by creating new transaction types and by customizing existing ones, starting with the main operations and account movements behind a transaction and ending with the visible fields and editability property, default values, check conditions, etc.

Each transaction can have it’s own currency and it can even have multiple currencies set where it involves, for example, settlement in another currency than the instrument’s trade currency. Clavis is multi currency and all assets are evaluated simultaneously in their trade currency but also in the portfolio’s currency.

Clavis has three main user interfaces for accomplishing the proposed access level: transactions, accounts, reports. The transaction worksheet displays historical data which can be easily filtered and accessed to the highest level of detail. The account interface makes available several screens for viewing and understanding the history of each account, by displaying information about the balance history, about the origin of each account movement that influenced that balance, and even an account extract.

8. NAV, re-evaluation

In accordance with local legal regulations applicable to Fondul Proprietatea, Clavis can evaluate all kinds of financial instruments into which Fondul Proprietatea may invest, and even more than those kinds. The evaluation rules are highly customizable, starting with the required data for evaluation, continuing with setting up calculations using that data and finishing with precise rounding conditions.

When calculating NAV, the steps that will be followed during the day are: transactions recording (automatic import and/or manual operation), market prices recording (automatic import and/or manual operation), automatic NAV calculations initiated at the user’s command. All daily activity can be complemented by manual user intervention at each step (of course, assuming that the permission matrix will allow such interventions).

Clavis can work with any NAV calculation frequency. The portfolio evaluations are set to read dynamically the relevant information from the previous valuation or last month’s valuation depending on the context. The portfolio rules can be customized for the Client as to respect the exact workflow depending on NAV computation frequency.

Clavis valuation user interface is composed of several tabbed pages where each type of asset is presented. Each of the pages has a specific column list which is relevant for the user in checking and evaluating each type of asset. For example, the bank deposits are present in a “Deposits” tab page, and bonds are present in a “Security” tab page.

Clavis valuation rules are conditioned by various attributes of the financial instrument, by market prices availability and so on. The same financial instrument or type of financial instruments may be evaluated differently from one position to another, depending on the set conditions; this leads to the possibility of having the mentioned valuation methods.

Clavis can be set to calculate each type of asset depending on available imported data complemented by computations which are performed by Clavis itself. There is no boundary in the possibility of setting the valuation formula as long as the necessary data exists in the system.

Clavis should be able to map portfolio items (financial instruments) and non-portfolio items in order to produce reports in compliance with legal regulations.

For non-portfolio items (including, but not limited to: tangible and intangible non-current assets, receivables, other assets, prepayments, all categories of liabilities / debts and provisions) Clavis is able to take information from the trial balance prepared in accordance with Romanian accounting regulations produced in the accounting application.

The user interface for calculating the current NAV can be used also to access the historical NAV reporting, no matter the time span between that valuation and the current date. Also, the reports can read older portfolio data, not just for the recent portfolios.

9. Dividend Module

The Dividend module maintains the details regarding issuer’s dividends and related collections of dividends. The application allows manual input of dividend record dates according to General Shareholders Meeting (“GSM”) and the type of companies (listed / unlisted).

The Dividend Module allows for input of various relevant dates:

  • Date of the GSM when dividends were approved (which for unlisted companies is the date when dividends are recorded in Fund’s accounting)
  • Dividend record date
  • Ex-dividend date (which for listed companies is the date when dividends are recorded in Fund’s accounting)
  • Pay date (if applicable) = if specified in the GSM decision
  • Deadline for dividend payment.

The Dividend module allows manual management of dividend payment deadlines, currency and other details. Different calculations can be done by the Dividend module, such as total net/gross dividend, balances. Dividend Module should is linked with:

  • Accounting Module (Wizpro Accounting) for automated G/L entries for dividends recording
  • Transactions Module – transactions in current accounts, for dividends collections
  • Transactions Module – Fund’s holdings in portfolio companies as at dividend record date, for the number of shares used in computation of gross dividend income.

10. Reports

Clavis it is running in production for similar Romanian Clients and it complies with legal regulations. The reporting module uses several export formats like .csv, .txt, .xls, .xml, .pdf which can be used interchangeably for each report.

At Fondul Proprietatea Clavis includes internal standard and customized reports as well as legal mandatory reports.

Achievements:

  • Stable integrated solution that responds to all customer needs
  • Happy customer that is evolving using Dorsum ClavisAsset solution