“System XYZ 5.

0 – Increments 1 &
2”

Project Charter
 SYSTEM XYZ 5.0 INCREMENTS 1 & 2
PROJECT CHARTER
Version #: 1.1 Issue Date: 10/2/2006

Project Charter Purpose

This Project Charter outlines the purpose, objectives, and scope of the project.
The purpose of a Project Charter is:
• To provide an understanding of the project, the reason it is being conducted, and its justification;
and
• To establish the general scope early on in the project.
o The business needs of the project
o The proposed solution:
§ Major deliverables
§ Timeline
§ Resource requirements
The objective of a Project Charter is:
• To formally authorize a project; and
• Ensure that all the parties involved (business, project, external partners) have a common
understanding about the business issues and proposed solution to ameliorate these issues.
The scope of a Project Charter is:
• The business need that the project was undertaken to address; and
• The proposed solution with high-level requirements to achieve it.
The Project Charter is prepared by:
1. The project sponsor
2. The assigned project manager
It is reviewed and approved by the Project Steering Committee.

Document Information and Revision History

Version Date Author(s) Revision Notes

1.0 10/2/2006 Michael Ahrens New
1.1 10/5/2006 Michael Ahrens Added comments from Rob Hill

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Table Of Contents

1. INTRODUCTION..................................................................................................................................................................4
1.1. OVERVIEW OF THE PROJECT .................................................................................................................................... 4
2. PROJECT OBJECTIVE AND SCOPE.............................................................................................................................4
2.1. OBJECTIVE ................................................................................................................................................................... 4
2.2. SCOPE ........................................................................................................................................................................... 5
2.3. M AJOR DELIVERABLES.............................................................................................................................................. 8
2.4. TIMELINE ..................................................................................................................................................................... 9
2.5. BUSINESS NEED OR OPPORTUNITY ....................................................................................................................... 10
2.6. FINANCIAL BENEFITS OF THE PROJECT ............................................................................................................... 10

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1. Introduction

1.1. Overview of the Project

The objective of the project is to re-engineer the back office related Java processes and Delphi application of
System XYZ 3.4.2 using J2EE based architecture that will give scalability, stability, information reliability,
traceability, functional extensibility and other benefits described in Objectives section (1.1).

For the re-engineering, business analysts will assimilate requirements and will extract business logic from
the reverse-engineering documents prepared by the technical team, and complete the User Requirements
Documents (URDs). The technical team will develop a high level design and a detailed design based on the
approved requirements followed by construction, QA, UAT and deployment.

The scope of work covered in the September 25, 2006 SOW will be delivered in 2 increments, and hence
these streams of work will be referred as Increment 1 and 2. High level scope coverage of these increments is
given below:

• Increment 1: Re-engineering of APost related processes of System XYZ 3.4.2 and some enhancements
• Increment 2: Re-engineering of Account Manager application and related processes of System XYZ
3.4.2 and some enhancements

2. Project Objective and Scope

2.1. Objective
The objectives of the A5 – Increment 1 project are detailed below:

• Re-engineer the JPost related Java processes and Account manager Delphi application of System XYZ
3.4.2 system using latest technologies with a proven track record and aligned to the technologies
identified for A5.

• Re-engineered system will have to be 100% functionally compatible with existing JPost/Account
Manager. Exceptions to this need to be approved by CFS.

• Re-engineered system will have to provide a functionally extensible and scalable design, transaction
traceability, performance throughput better than the existing system, and one that is easily configurable
and maintainable.

• Re-engineered system will have to be multi-client aware. This means that the same server based process
would be able to handle requests from multiple clients.

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2.2. Scope
The scope of work covered in the September 25th, 2006 SOW falls in 2 major lines of work as given below.
These will be delivered in 2 increments.

• Increment 1: Re-engineering of APost related processes of System XYZ 3.4.2 and some enhancements
• Increment 2: Re-engineering of Account Manager application and related processes of System XYZ
3.4.2 and some enhancements

The detailed scope is as follows:

Increment 1 In-Scope
1. Re-engineer the current posting system using J2EE framework in WebSphere Application Server
(WAS) environment. All posting will continue to use the current databases. The existing database
structures that currently encapsulate various G/L operations will be maintained. These back-end
databases are used by various reports and extracts. Current posting System includes:
a. JPost library
b. Apost server
c. Apost batch

2. Complete the following posting functionality of the existing system in the new framework:
a. PS – Trade date purchase or sale
b. OTE – Literally, “open trade equity”; figuratively, mark-to-market/valuation
c. PSS – Settlement date purchase or sale
d. CVAL – also known as “curval”; f/x valuation mechanism

3. Resulting Bug Fixes - Since the posting system is being rewritten, following old bugs in the current
system will have to be fixed.
a. Add logic to not allow one-sided journal entries in the GL
b. No hanging processes when attempt to post – now the current posting system often needs
to be recycled
c. Allow multiple people to work on the same fund at the same time
d. At times when other people are using the system for posting entries it can take up to 20
seconds to enter a post and have it show up. The new system will perform better than the
current system provided that they have been tested under the same conditions with the
same data inputs.
e. Develop multi client system to simultaneously service multiple (over 200) CFS clients from
the same system maintained in a clustered Websphere container environment.
f. Improve clarity of Posting error messages in the front end for the end user
g. Out of balance (debit versus credit) entries cannot occur (auto, manual or loaded)

4. Framework Work – Needs Resolution

a. Data Access Layer
b. Data Access Object Framework
c. Instrument and Pricing Reference Components
d. Posting Engine Exception Framework

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5. Existing back office databases in Sybase will be used as-is in Increment 1, except for one new table
that will be added for mapping the trades and the back office transactions.
6. Will include any changes that affect known posting issues (as of September 13th, 2006) in 3.4.2
patch 10 while Increment 1 is in development.

7. APOST will throw an exception if there is a negative FX rate. Front ends and loaders will not be
addressed in Increment one.
8. Maintain existing stored procedure interfaces that currently encapsulate various G/L operations.
These back-end data interfaces are used by various reports and extracts. This would provide
backward compatibility between the new back office data model and other components.
9. Provide traceability for the transactions along with proper posting_id generation including all the
critical information. Covers adding a new table to map the back office transactions to orders.
10. Improve transparency of pending APosts, errors, changes and enable admin users to track them.
Keep the trades that are included in each posting and errors would change if appropriate. To be
improved in Increment 2.
Note: this enhancement will be covered by the table referred in point 5 above that will map
the back office transaction to Orders.
11. For missing pricing for end of day run – create an error report however allow for the rest of the
posting to run – do not error on each line and force a correction only after the process is completed.
Note, creation of an error report given in this enhancement only indicates the error
messages returned by Posting system, and it does not indicate a new screen called error
report to be developed.

Increment 2 In-Scope
1. Re-engineer existing Account manager functionality and DFLT Server/FIReports library in the new
J2EE framework.
a. All existing account manager reports
b. Balance sheet view
c. General ledger view
d. P&L view
e. Traceability from back office transactions to Trades

2. Complete the existing posting module in the new framework. The entire posting module includes
all items covered in Increment 1 plus the following covering the existing Manual Posting
functionality:
a. TRF – refers to a transfer
b. Cust
c. Fees
d. Cash

3. Conversion of Extracts - Migrate those Extracts that depend on the current JPost library to make use
of new Posting components.

4. Enhancements / Issues

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a) Improve transparency of pending APosts, errors, changes and enable admin users to track
them.
b) Provide proper data snapshots so that the drill information on an account balance directly
constitutes the elements of the balance. Balances should be able to be retrieved for all
accounts for all dates.
c) Provide a new Login screen to enable only authorized users to use the Account manager
web application.
d) At times when other people are using the system for manual entry it can take up to 20
seconds to enter a post and have it show up. This will be improved as much as possible
within the new code base and the performance will not degrade below current standards.
e) Introduce a user ID for all manual or batch journals. (aka who ran it through stamping the
userid, time, and action).
f) Remove the USD reference from the screens – reference fund base currency. Whenever a
report or screen displays the Fund’s base currency it should use the actual currency symbol
and not hardcode USD.
g) A Back office journal entry loader. From Excel to System XYZ. The business would copy
data from Active into Excel then compute summaries within Excel (or pull data in
automatically for bank account interests) and then post these totals into our back end, this
will be using the underlying Account Manager’s Manual Posting (journal entries)
functionality.
h) Keep all existing grid view and user default functionality

12. Framework Work

a. Instrument & Currency (no changes to DB for this Increment)
i. Remodeling Instruments for More Flexibility, with the assumptions that the
changes will be minimal and the interface of the instrument and pricing
components developed in Increment 1 will not change.
b. Authentication and Authorization based on existing Sybase based authentication
c. Posting Engine Exception Framework expanded on from Increment 1 and will include
monitoring of business exceptions

13. As a side result of back office re-engineering, the defects in the current APost processes and
Account Manager application (as listed in Annexure 1) will be resolved.
14. New functionality introduced into the production System XYZ platform (3.4.2) prior to the closure
of Increment 2 URDs needs to be encapsulated for Increment 2 as it relates to Account Manager.

15. Provide traceability for the transactions along with proper posting_id generation including all the
critical information. Covers traceability from back office transactions to orders similar to the current
Account manager.
16. All reports should show any errors with messages and should always tie to the detail posting and
balance sheet/income statement. Account Manager reports in Increment 2 can be made to tie with
the balance sheet/income statement and GL view provided the tie (comparison) is done only after
the successful completion of posting of all pending transactions.

17. Replace all account manager reports with equivalents in new application. Reports should be
exportable to excel and to a pdf

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For new enhancements, Provider will require a CFS Subject Matter Expert to confirm the understanding and
design, and provide inputs when clarifications are requested.

New components and services will be developed to service multiple clients and hence the release of the
Increment 1 and 2 to a client can be done only if the client’s Sybase instance is of System XYZ 3.4.2
standard (or) at-least the required back-office tables and fields (data type same as 3.4.2) exists in the client’s
Sybase instance. Client specific tweaking of new components and services will not be done. In effect, if
System XYZ setup for any client does not confirm to data schema, business logic, UI of 3.4.2 standards, then
Provider will not provide any client instance specific fine-tuning as part of the scope covered in this SOW
(any effort spent towards System XYZ client specific changes will be considered fine-tuning).

Out of scope
The proposal submitted treats the following as out of scope for the purpose of this APost re-engineering
project:

o Enhancements to Order Manager, Active P&L, Security explorer, CA Manager, OE Exerciser,

Org explorer and other front-office and Middle office front-end Delphi applications, related
Java processes and Sybase tables.
o NAV calculations.
o Re-engineering of JCashFlow
o Usage of FinCad library in new Posting components

Note: The Support and Enhancement of the re-engineered system post warranty is out of scope under this SOW.

Out-Of Scope for both Increment 1 and Increment 2

1. Cash in front – want to view the cash accounts in the back displayed in the front.

2. We will NOT use Oracle and will continue to use the Sybase database
3. Proper closed periods

4. Proper cancel/corrects which means adding a new transaction, linking it back to the original
one, and marking the original as canceled. As opposed to now where we just modify the
existing data field and do not keep any transaction history

5. Connect securities that do not post now through TradeGen such as Equity Swaps (in 342
already) and Dividends (outside Increment 1 and 2)

6. Enhancements that are documented in various TSRs listed in Annexure 2 of the September 25th,
2006 SOW are out of scope.

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2.3. Major Deliverables

The major deliverables from this project are:
• Increment 1 – Posting module
• Increment 2 – Account Manager

2.4. Timeline
No Increment Milestones From date To date
1. Increment 1 Inception 6/19 9/8
Elaboration 7/3 9/22
Construction 8/21 10/27
Transition - System and non- 10/30 12/1
functional testing completion by
Provider QA
Transition – System and 11/6 12/22
regression testing by Company
QA
Transition – UAT by Company 12/11 12/22
End of year holidays 12/25 1/2/07
Transition – UAT by Company 1/2/07 1/30/07
(continued)
Transition – Deployment of 2/2/07 2/2/07
Application in production
environment
Transition – Support provided 2/2/07 5/2/07
for all client rollouts for 90 days
after deployment
2. Increment 2 Inception completion 9/25 12/1
Elaboration – completion of 10/16 12/1
Screen prototypes
Elaboration - completion of 10/30 12/15
Design
Construction completion 12/8 2/8/07
Transition - System testing 2/9/07 3/22/07
completion by Provider QA
Transition - completion of System 2/16/07 5/3/07
and regression testing by
Company QA. UAT by Business
Transition – Deployment of 5/3/07 5/3/07
application in production
environment

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No Increment Milestones From date To date

Transition – Support provided 5/3/07 8/3/07
for all client roll outs for 90 days
after UAT sign off
3 TradeGen
Requirements
TradeGen requirements 2/2/07 3/15/07
completion

* Phases were designed before METHODOLOGY was published.

2.5. Business Need or Opportunity

• Addresses serious production issues
• Mandatory increase of performance required to scale business
• Continues to validate processes that will be used on the overall project
(METHODOLOGY, working with Provider, etc.)
• Potential to increase system capacity
• One sided transactions will not occur
• Out of balance entries will not occur

2.6. Financial Benefits of the Project

Increments 1 and 2 lead us in regards to the entire System XYZ 5.0 initiative, which will maintain our
dominance in the Hedge Fund Administrative space.

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Project Charter Acceptance

Project Sponsor Approval:

____________________________________________________
Project Sponsor (Please Print Name)

Project Sponsor (Signature) Date

Project Manager Approval:

______________________________________________________
Project Manager (Please Print Name)

Project Manager (Signature) Date

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