Rainmakers was entrusted to program manage the buy-side launch of Repo CCP, Canada’s first Central Counterparty for clearing Repo fixed-income derivatives.  Success hinged on our ability to achieve Operational Readiness, by building consensus and aligning the execution of 7 pension funds and custodians.

The Case for Global Reform

The 2008 financial crisis was a clear indicator of what happens to global economic stability, when a financial system is weakened at its core.

The fabric of the US financial system was unravelled by several factors; a key contributor was excessive risk-taking in OTC derivative trading.  The result was a negative effect on market liquidity, resulting in deep exposures from bilateral positions between counterparties which were not sufficiently collateralized.    What ensued was the unthinkable – the collapse of industry titans like Lehman Brothers, and extensive bailouts for mega players like AIG.  

The G20 responded with reforms to reduce systemic risk, moving for the reduction of bi-lateral trading in favor of clearing through central counterparties (CCPs). 

Achieving Buy-in Through a Unified Voice

A key priority was the need to engage stakeholders and quickly form governance. In response, Rainmakers established a Strategic Project Management Office to set the course for where and how change would be driven.  We codified Terms of Engagement to articulate roles, responsibilities and expectations around the imperative for change.  The sole purpose was to ensure a Unified Voice – one that could accommodate the unique needs of stakeholders, while upholding the collective goals and obligations to bring Repo CCP to life.

Together, we created a Program Roadmap as a beacon for change; setting forth the cross-organizational scope, timelines, dependencies and risk management measures required to realize the transformation.

Deep engagement from CROs and executive Leadership, provided the support required to clear path and ensure strong linkages between program execution and the overarching strategy.

Enabling Change

We understood that client stakeholders were the key to decomposing systems, defining business processes and bringing the organizational context to achieve strategic transformation.   Operational Readiness didn’t happen by chance – it was born out of a concerted effort and shared commitment from stakeholders to achieve operational excellence.   Our task was to bring the focus and leadership to pull it all together:

• serving as the driving force and impetus behind the change
• facilitating discovery and visioning sessions to design workflow and technical requirements   
• providing thought leadership to help the team surface the data and processes critical to a successful change
• defining the Target Operating Model and identifying opportunities to improve practice, policy and process

The collaboration yielded new technology and practice, that were firmly aligned with the strategic drivers for CCP:

• multi-enterprise interaction models to align business practices (across financial, risk, trading, operations, payments and treasury) with regulatory standards
• cohesive metrics to guide service execution between client and BPO teams;
• integration and modernization of financial technologies to enable trade execution with the CCP platform.

Enduring Solutions

Despite the promise behind the new centralized clearing solution, the team knew the real challenge lay in fostering uptake and ensuring sustainability.

Implementation required the team to navigate the complexities of market cycles.  Moreover, the connected nature of the CCP capability required that each organization implement in sync, ensuring seamless integration with no loss of business continuity.  To manage down risk, we created a holistic transition strategy to identify the change tactics needed for service resilience, and further reinforced the strategy with comprehensive training, onboarding and communication plans.

But getting the new capability up and running, was only half of the battle.  There was still much work to do to ensure the operating model could be maintained over time.    Rainmakers worked in concert with the team to chart a path from adoption to sustained operation.  We led a series of retrospectives to surface the measures required to embed operational behaviors and provide for continuous improvement.  

Among the key outcomes, were go-forward governance and a support model.  These would provide a means to uphold market-wide standards, support the introduction of new LCMs and sustain the buy-side Operating Model over time.