Fully Automated FX

After manual processes designed to convert non-base currency trade receivables became inefficient and prone to error, a multi-billion-dollar alternative asset manager sought an automated, scalable, and cost-effective system for converting incoming euros and sterling balances into U.S. dollars across multiple funds.

MUFG Investor Services’ FX Overlay team deployed a cross-border taskforce to quickly assess, build, and implement an automated FX conversion and hedging solution with minimal disruption to the client’s ongoing activities.

• Scope: Three-month engagement—two months of active collaboration and one month of client testing;
• Team: FX specialists from Cyprus, London, Cayman, and Singapore;
• Technology: MUFG Investor Services’ Passive Currency Overlay (PCO) engine automatically ingests FX order files, executing trades, and reporting within 30 minutes of execution;
• Enhancements:  Automated processing of incoming non-base currency balances, triggering FX conversions, adjusting hedge positions, and eliminating the need for manual FX orders.

Any incoming cash receipts in non-base currencies were automatically detected, converted, and hedged in real time—without manual intervention—through integrations with MUFG’s MFX platform. The system also streamlined the client’s cash swap workflows, triggering precise hedging adjustments.

The client transitioned from a high-touch, manual FX process to a fully automated daily workflow that improved efficiency, reduced operational burden, and mitigated risk. The client no longer needs to expend internal resources on daily FX orders and instructions.

The client achieved:

• Enhanced daily reconciliation accuracy
• Real-time bank sweep capabilities
• Reduced dependency on internal FX operations
• Ensuring FX best execution

Additional benefits:

• FX hedging trade cost analysis
• FX rate transparency
• Daily reconciliation
• Bank sweep capabilities
• Fund distribution calculation
• Liquidation support
• Payment processing
• Automated FX settlement
• Cash flow management
• Scalable FX solution for future fund growth