Establishment & Development of a Middle Office

Segregation of duties is a risk management technique used in the Treasury end-to-end process that prevents one person from having overall control of a financial operation from initiation to settlement. This separation principle repeatedly appears in regulatory and established best practice guidelines and means that the risk of error as well as fraud is reduced considerably by the adequate separation of Treasury responsibilities. Consequently, the Treasury operation should be segregated into three discrete functions: Front, Middle and Back Offices. 

Whether a Middle Office is already in place or if it needs to be established, XMI will outline the optimal structure for the function and clearly set out the roles and responsibilities. This will be benchmarked to international best practice, thereby satisfying, as a minimum, all existing and impending external regulations. Most importantly, it should be looked upon as a practical means of greatly increasing the chances of avoiding a control breakdown – be it deliberate or accidental – which could cause substantial financial and/or reputational harm.