We are a team of seven, of which five are qualified accountants, and together we have responsibility for maintaining accounting, reporting and budgetary control systems for Gordian, Sigma and Theta. Our team is also responsible for providing management information to Gordian’s executive management and business units, to support decision-making and producing external financial, regulatory and tax reporting for Gordian, Sigma and Theta.
We work very closely with a multi-disciplined team from PricewaterhouseCoopers that provides audit, accounting, taxation and other related services to Gordian and Sigma.
We are a highly professional and experienced operations team with wide ranging responsibilities. A number of us joined Gordian with prior knowledge and experience of securities and derivative settlements, custody, cash management and issuing and paying agency services which we gained in a variety of roles with some leading US banks. Since working at Gordian we have increased our technical skills and knowledge through a combination of internal and external product and business training and furthered our experience by handling the settlement activity of Sigma and Theta during successive periods of significant growth.
We are responsible for settling all of the trades transacted by Gordian on behalf of Sigma and Theta; this includes confirming trades and instructing the movement of securities and cash. On a daily basis we are involved in settling purchases and sales of securities, issues and redemptions of commercial paper and medium-term notes under Sigma’s various debt programmes, as well as various hedging contracts including forward rate agreements, interest rate collars, foreign exchange and all types of swaps.
In addition to settlement activity; we are responsible for the “life-cycle” events related to all of the financial instruments held in Sigma’s substantial balance sheet. We are responsible for fixing and/or agreeing coupon rates on all instruments, some of which are highly structured. This is an important part of the process for ensuring accurate and timely receipt of coupons and pre-payments on Sigma’s investment grade portfolio and related hedges and accurate and timely payment of coupons on Sigma’s capital notes, rated debt and related hedges.
We continuously monitor the performance of Sigma’s service providers through a combination of contractual agreements and regular reviews. This ensures that Sigma receives cost effective and high quality service from its providers of cash management, issuing and paying agency and global custody. In June 2001 we completed a lengthy review of alternative custody provision for Sigma which resulted in the appointment of Royal Trust Corporation as Sigma’s global custodian.
As part of the recent launch of Theta (on 15th December 2004) we completed a thorough review of custody provision resulting in the appointment of J.P. Morgan as Theta’s global custodian.
We have a combined total of more than 20 years experience in banking operations and control which allowed us to establish and provide ongoing development of a highly effective Independent Control function. Our primary focus is to ensure strict compliance with (1) risk limits and key controls for Sigma and Theta and (2) UK regulations over the conduct of Gordian’s investment business in the UK (i.e. FSA rules).
We report directly to Gordian’s Chief Financial Officer, who in turn reports on control matters to the separate boards of Gordian, Sigma and Theta. Our role involves rigorous limit checking and breach escalation for compliance with Gordian’s Investment Management Contract with Sigma and Theta, and additional internally set buffers.
We are responsible for ensuring that all of Sigma’s investment assets and related hedges, as well as Theta’s funded and unfunded portfolio positions are objectively priced using external sources. We produce and distribute weekly and monthly portfolio monitoring reports to rating agencies, investors and counterparties, perform bank and custody reconciliations for both Sigma and Theta, provide security administration for all Gordian’s systems and conduct a regular test of Gordian’s contingency arrangements. Additionally, we monitor the credit ratings of all securities, counterparties and banks.
While we are at the centre of Gordian’s control environment, there is a ‘control culture’ within Gordian that imposes a responsibility on all staff to comply with risk limits, internal procedures and regulatory requirements.
