A day in the life of Spiko Smart Cash operations

In a previous article, we opened the hood of our operations to walk you through a typical day at a money market fund.

Our new product Smart Cash — officially the Spiko Amundi Overnight Swap Fund (or SAFO) — works very differently. Its mechanics are based on a Total Return Swap (TRS) rather than the purchase of Treasury bills. If you are not familiar with the TRS mechanism, we recommend reading Smart Cash: everything you need to know about our new product first.

In this article, we take you behind the scenes of Smart Cash to walk you through, step by step, a typical day.

At any time of day: account opening

At any point, new clients can open an account on Spiko and access Smart Cash. Once their account is active, they can independently place deposit and withdrawal orders on the Spiko platform.

These orders translate into a bank transfer to (or from) one of the Spiko Smart Cash collection banks — namely Memo Bank or Banking Circle. These banks allow us to provide each of our clients, in each currency, with unique IBANs, and to notify them in real time when their funds arrive. That said, the money does not stay with these banks: it is systematically transferred to CACEIS Bank, the asset custody subsidiary of the Crédit Agricole group.

At 12:25 PM: order centralisation

This is the key moment of the day for Smart Cash. All deposit and withdrawal orders placed on the Spiko platform before 12:25 PM become irrevocable. They will be executed on the same day. Orders placed after 12:25 PM will only be executed the following day.

💡 In asset management jargon, this order execution deadline is called the fund's cut-off.

Just after 12:25 PM, Spiko prepares a file called the "collection notice". It summarises the net flows for the day in each of the fund's currencies (EUR, USD, GBP, CHF). This file is then sent to our partner Amundi, the largest asset manager in Europe, to whom we have entrusted the management of Spiko Smart Cash.

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Between 2:00 PM and 3:00 PM: managing the swap

This is the step where Smart Cash truly diverges from a money market fund. Once the day's net flows are known, the Amundi portfolio management team must adjust the size of the swap. Our primary counterparty for the swap is BNP Paribas.

As a reminder, Smart Cash holds in full ownership a portfolio of shares in large listed companies (primarily from the S&P 500). The daily performance of this portfolio is entirely exchanged with BNP Paribas in return for the risk-free rate (€STR for the EUR share class, SOFR for the USD share class, etc.) plus a premium called a "spread".

So if the day's net inflows are positive, the securities portfolio and the notional of the swap must grow accordingly. If they are negative, the reverse applies. This is precisely what this step achieves: Amundi communicates to BNP Paribas the new target swap size in each currency. This new size will only take effect from the following day, as we will see below.

💡 The notional of the swap is simply the reference amount on which the contract's flows are calculated. In the case of Smart Cash, the notional always equals the total assets of the fund: this is the amount on which BNP Paribas pays the fund the "risk-free rate + spread", and also the amount against which the performance of the securities held by the fund is measured.

In parallel, early afternoon: Smart Cash accounting

At the same time, between 2:00 PM and 3:00 PM, the fund's accountant gets to work. Accounting has been delegated by Spiko to CACEIS Fund Administration, also a subsidiary of the Crédit Agricole group.

The accountant has one specific task: to calculate the fund's net asset value (NAV). This value represents what a fund unit would be worth if the entire portfolio were liquidated at its market value for the day.

Unlike our money market funds — where valuation only covers Treasury bills — the Smart Cash accountant must value two legs of the operation: the equity portfolio on one side, and the swap contract with BNP Paribas on the other.

At 5:00 PM: accounting close and NAV publication

Once the accounting is finalised, Amundi must cross-check the net asset value. The NAV is then officially published and distributed across the main financial information platforms (Bloomberg, Morningstar, Sicavonline, etc.), to the Autorité des marchés financiers (AMF), and on the Spiko platform.

As with our other products, we also publish at this point the complete portfolio composition of Smart Cash: the full list of equities held, as well as the details of the current swap. This allows you to know, in real time and with full transparency, exactly how the product works.

At 6:00 PM: execution of deposit and withdrawal orders

Once the NAV is known, we can execute the orders that were centralised at 12:25 PM. In practice, this means:

• For deposits: issuing new fund units by dividing the deposited amount by the day's NAV, then crediting these units to each client's account.
• For withdrawals: cancelling the corresponding units and preparing outgoing bank transfers to clients' accounts, which will be sent the following morning.

We then produce a final collection file, which we send to the accountant for the next day's calculations.

The following morning: portfolio adjustment and effective swap update

This is the most technical step in Smart Cash's operation: the effective update of the swap with the banking counterparty (BNP Paribas). This step may seem complex, but it actually comes down to just two flows between Smart Cash and BNP Paribas — a securities flow and a cash flow. The direction and amount of these two flows depend on the combination of two elements:

1. The performance of the securities held the previous day: if the portfolio has risen, the fund returns the gain to BNP Paribas (that is the very principle of the swap); if it has fallen, BNP Paribas pays the loss to the fund.
2. Smart Cash's net inflows from the previous day: the size of the securities portfolio must evolve in line with the fund's assets. Positive net inflows require purchasing more securities; negative net inflows require selling some.

These two elements are therefore taken into account and netted into:

• A securities transfer between the fund and BNP Paribas (in one direction or the other, depending on the case);
• A corresponding cash transfer, which also includes the remuneration owed by BNP Paribas under the swap for the previous day (risk-free rate + spread).

💡 BNP Paribas acts both as the swap counterparty and as the counterparty for the purchase or sale of securities. This is what makes the operation so seamless: a single point of contact, a single settlement at each rebalancing.

The following morning, late: sending withdrawal transfers

We have now reached the final step of this choreography. Spiko sends the withdrawal transfers to the bank accounts of clients who requested a withdrawal the previous day. These clients typically receive their money late in the morning, depending on their bank.

The cycle then begins again for a new day!

Do you have a question or are you interested in our Smart Cash product? Feel free to reach out at contact@spiko.io.

At Spiko, we offer simple access to risk-free rates in euros, dollars, pounds sterling, and Swiss francs through regulated financial products. Our money market funds hold Treasury bills issued by the most creditworthy sovereign states, while our Smart Cash range delivers enhanced daily returns through Amundi's expertise in Total Return Swap strategies. Daily liquidity, with no notice period, no penalties, and no withdrawal fees.