Strategic Context

In today’s rapidly evolving investment management landscape, legacy mainframe systems increasingly pose challenges in terms of maintenance, scalability, and integration with modern trading platforms. This case study examines the successful migration from an in-house mainframe-based investment accounting system to a modern cloud-hosted solution. The migration represented a critical step in modernizing the firm’s operational infrastructure while maintaining business continuity.

Business Drivers

The migration initiative was driven by several key factors. The legacy system, while reliable, had become increasingly difficult to maintain and enhance. Key challenges included:

  • Limited integration capabilities with modern trading systems
  • High maintenance costs of mainframe infrastructure
  • Difficulty in implementing new regulatory and compliance requirements
  • Lack of real-time processing capabilities
  • Complex inter-connected and tightly coupled processes for system updates

Implementation Scope

The project encompassed comprehensive modifications across the entire trading and operations ecosystem:

Interface Modernization

The migration required rebuilding all integration points between the Order Management System (OMS) and the accounting system, including:

  • Trade feed interfaces for new transactions
  • Start-of-day position and cash balance synchronization
  • Intraday trade booking workflows
  • Real-time IBOR system creation and updates
  • Corporate action processing flows

Data Validation Framework

A robust validation framework was implemented to ensure data integrity across systems:

  • Position representation mapping between legacy and new systems
  • Cash balance reconciliation processes
  • Trial balance verification procedures
  • Historical data migration validation
  • Real-time data synchronization checks

Operational Workflow Implementation

The migration required significant changes to existing operational workflows:

Investment Operations

The operations team implemented new procedures for:

  • Start-of-day position verification
  • Intraday cash balance updates
  • End-of-day reconciliation
  • Trial balance review
  • Exception handling

Compliance Updates

The compliance engine required significant enhancements to:

  • Track real-time cash balances
  • Monitor short sale proceeds in cash numbers
  • Account for non-trading cash activities, interests, payables/receivables, dividends processing
  • Integrate with new accounting trial balances
  • Track unsettled P&L impacts in conentration tests

Results and Impact

The successful migration delivered significant benefits:

  • Enhanced real-time portfolio visibility
  • Improved operational efficiency through automation
  • Reduced infrastructure costs
  • Better integration with modern trading systems
  • Improved regulatory compliance capabilities
  • More flexible reporting capabilities

The parallel run period of 4 weeks proved crucial in fine-tuning the integration points and ensuring data accuracy. The methodical approach to validation and verification ensured a smooth transition with minimal disruption to daily operations.

This migration marked a significant milestone in the firm’s technological evolution, establishing a modern foundation for future growth while maintaining operational excellence and risk management capabilities.