Service Overview: Plan Sponsor

Insignis Portfolio Intelligence (IPI) for Plan Sponsors is a data management service which provides timely, comprehensive and secure account information on derivative positions. As plan sponsors work to establish best practices for monitoring, managing, and mitigating investment risk while increasingly more complex instruments are added to their investment strategies, the need for access to more complete and more frequent information presents a unique challenge.

Custodians, the most commonly used source of plan sponsor data, can be a particularly good and reliable source of information for traditional (i.e. custodied) assets. But many of the standard reporting environments from which custodian reports are derived are not structured to store the relevant attributes of complex assets like exchange-traded futures and options on futures, OTC swaps, swaptions, or other over-the-counter deals. Even keeping track of foreign exchange forward positions can present a challenge when the plan sponsor wants to net exposures to a counterparty or counterparties across multiple managers.

Insignis approached this challenge for its plan sponsor clients by identifying the optimal data source for each of these complex instrument classifications. Investment managers were selected as the source for over-the-counter instruments; and futures clearing brokers were selected as the source for exchange-traded futures and options on futures.

Next Insignis worked with each investment manager and futures broker to create automated daily, data processes.

Data Feeds from Investment Manager: On behalf of our clients, Insignis collects data on a variety of complex instruments, including FX spot and forwards, OTC swaps, swaptions, and other OTC deals. At this point, Insignis maintains more than 50 manager-specific applications. The data is then standardized and aggregated into a centralized client database.

Because Insignis is a data company the demands placed on each investment manager were limited to the file content rather than file format. So rather than asking each of the managers to develop a custom solution for the plan sponsor client(s), they were each given a minimum set of data requirements and allowed to present any reasonable automated solution. This flexibility allowed Insignis and the managers to work together to build scalable solutions to fulfill client requirements for high accuracy from a proven feed at minimal cost.

Data Feeds from Futures Broker: Insignis maintains active data feeds with most of the top fifteen futures brokerage firms. This data is consolidated and standardized into Insignis' database. This transformation is accomplished as follows: The incoming broker data is standardized though maps which convert each broker's codes to Insignis' exchange-traded futures contract database. The standardization includes exchange identification, contract descriptions, price formatting and other peripheral information (commission capture, collateral summarization, etc)

In addition, due to Insignis' extensive experience with futures data, new brokers can be added as requested. This addition can usually be accomplished with minimal additional work by the broker. Most futures brokers have access to one or more sets of data feeds which include the same information reported in their daily statements. So when a futures broker receives a request to become a new data provider to Insignis, the broker is encouraged to use those standard feeds rather than develop a custom solution. Once the feed is in place each broker has a relatively simple process by which accounts are added or removed as the plan hires or terminates managers.

Once the data is captured and standardized, Insignis offers sophisticated tools that allow plan sponsors to access the information through a variety of delivery mechanisms, including:

• Web-based hierarchical reports that allow users to drill into the data to view reports such as the sum of all exposure to a counterparty, the individual positions which comprise the summary exposure, and a variety of additional views accessible through drilldown report navigation.
• Application-specific text files transmitted via encrypted ftp to be uploaded and integrated into third-party systems for risk or compliance analysis as well as other proprietary reporting systems at the plan sponsor.

For more information please contact Insignis at 312.368.3633 or email us at: info@insignis.com