SD-17.3 — Corporate Treasury

Business Domain: BD-17 Corporate Services & Resources (Cross-cutting — corporate) · Applies: BOTH

Purpose

Manages the management company’s own money. SD-17.3 is the firm’s corporate treasury: it manages the firm’s own cash and working capital, runs the corporate banking relationships, raises and services the firm’s corporate debt and credit facilities, manages the intercompany funding across the firm’s legal entities, and keeps the firm solvent and liquid. It is the firm managing its own money, as distinct from managing its clients’.

It is not the treasury of the portfolios and funds — their cash, liquidity and collateral are BD-11 Treasury, Cash & Collateral. SD-17.3 is the firm’s own treasury; BD-11 is the funds’ and portfolios’ treasury. The firm’s treasury versus the funds’ treasury — the owner of the cash decides the owner of the capability.

Service Operations

Manage corporate cash and working capital — manage the firm’s own cash balances, working-capital cycle and short-term liquidity.
Run corporate banking — maintain the firm’s corporate banking relationships, bank accounts, payment rails and bank mandates.
Manage corporate debt and facilities — raise, draw, service and repay the firm’s corporate debt and revolving credit facilities, and monitor the covenants.
Manage intercompany funding — fund the firm’s legal entities, manage the intercompany loans and cash pooling, and operate the intercompany settlement.
Forecast corporate liquidity — forecast the firm’s cash position and liquidity headroom, and manage the buffer against the regulatory and covenant minima.

Inputs and outputs

Inputs: the firm’s cash flows, the budget and forecast from SD-17.2, the corporate banking data, the management-fee and carry receipts from SD-12.11, the debt and facility terms.
Outputs: the corporate treasury position, the corporate liquidity forecast and the intercompany funding record — consumed by SD-17.1 Corporate Accounting & Controllership, SD-17.2 Financial Planning & Analysis, SD-16.3 Regulatory Reporting & Filings and the governing bodies.

Entities

Consumes: the firm’s fee and carry receipts from SD-12.11; E-01 Legal Entity (the firm’s own entities); E-06 Cash Flow Event (the firm’s corporate cash flows); the SD-17.2 firm’s cash flows, the budget and forecast.
Owns: the firm’s corporate treasury position and corporate liquidity forecast — a process artefact.

Standards

ISO 20022 and the banking payment rails for the corporate treasury (the funds’ treasury standards are BD-11’s).
Corporate-banking and cash-management practice — the bank-mandate, covenant-monitoring and cash-forecasting disciplines.

Open extensions

The corporate-treasury position sub-model and the boundary with BD-11.
The intercompany-funding and cash-pooling sub-model.
The Service-Operation-level input/output contracts.