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Phase One of the project, completed in 2008, automated Principal’s compliance monitoring of domestic equity and fixed income instruments – making Principal the first Mexican firm to go live on Charles River IMS. This final phase provides Principal AFORE and Principal Fondos de Inversión users with automated portfolio management, trading and compliance monitoring for local and international asset classes on a single-consolidated platform. Charles River’s implementation experts also built seamless interfaces with Principal’s proprietary mutual fund accounting system and third-party pension accounting system, Soluciones. In the near future, Principal plans to support more derivative instruments, including interest rate swaps.
During the rollout, Principal was instrumental in advising Charles River on México’s unique requirements and workflows. Charles River IMS supports Mexican fixed income instruments, including corporate and government Bonos, CETES and UDIBONOS. Users can also manage collateral for Mexican repo transactions, including interest rate calculations.
“To stay ahead of México’s evolving regulations for mutual fund and pension portfolios, we required an integrated platform that could streamline workflows and support complex investment instruments,” said Alejandro Echegorri, Chief Investment Officer, Principal Financial Mexico. “With Charles River IMS, we have a truly global system that enhances our competitiveness in the region. Our traders, portfolio managers and compliance officers can now trade and monitor all asset classes – including specialized debt for local, global and emerging markets. Further, we have eliminated our dependence on spreadsheets and reduced our risk throughout the trade process.”
“Charles River provides asset managers in México and worldwide with the technical infrastructure to support new asset classes and increased trade volumes for future growth,” said Spiros Giannaros, Vice President-Sales, Americas, Charles River Development. “The system makes it easy to analyze portfolios and implement changes in real-time. Users also have an end-to-end audit trail to validate compliance throughout the trade lifecycle.”
Charles River IMS’ advanced functionality helps Principal comply with Mexican regulations. For example, Principal AFORE can meet CONSAR (Comisión Nacional del Sistema de Ahorro para el Retiro) pre-trade reporting requirements for derivatives. Principal Fondos de Inversión can adhere to CNBV (Comisión Nacional Bancaria y de Valores) asset allocation rules limiting mutual fund exposure to issuers. Charles River IMS has pre-built compliance libraries containing over 1,700 regulatory and general example rules across 35 regulatory bodies of 20 countries.
Charles River supports five buy-side client firms in México,and serves over a dozen firms across Brazil, Chile, and Panama.
About Principal Mexico
The Principal operates in México through four separate entities: Principal AFORE (pensions), Principal Pensiones (annuities), Principal Fondos de Inversión (mutual funds and asset management), and Principal Seguros (life insurance and accumulation).
Principal AFORE is a private pension company that manages and administers individual employee retirement plans through the state mandatory retirement system Administradoras de Fondos de Retiro (AFORE). Since our inception in 1997, Principal AFORE has earned a top-five market position in the pre-retirement accumulation market.
Principal Fondos de Inversión has generated impressive growth in the retail mutual funds segment and has shown market leadership in the creation of specialty products catering to high net worth clients. In addition, the company has begun important distribution agreements that will permit us to develop brand recognition and increase our assets under management.