uperDerivatives (SD), the derivatives benchmark, reports significant growth in Q4 of 2008 over the previous year, with 83-percent growth in new customers and renewals in December alone, as demand from institutions in driven by cost control and the need for pricing transparency and accurate risk management in derivatives.
The growth stems from increase demand for SD’s front office pricing system and its derivatives portfolio revaluation service. Demand for the front office system has been strongest from the banking sector with some banks adopting SD’s solutions for their entire trading and sales operations.
The Industrial and Commercial Bank of China (ICBC Asia), Wells Fargo and La Caixa are among customers using SD to enhance their derivatives service to their clients and their ability to price, manage and execute their own derivatives strategies.
SD’s front office system provides a web-based derivatives real-time and retroactive pricing, productivity tools and execution application for the broadest coverage of asset classes, structures and geographical reach. This enables organisations to conduct all their front- and middle-office work flow in one system, including the generation of revenue opportunities and the management of all derivatives risk, either for their own holdings or those of their customers.
SD’s unique methodology delivers real-time, independent pricing for the widest range of derivatives, from vanilla to the most advanced exotic structures, covering FX, interest rate, equities, energy, commodities and credit derivatives.
It utilises a wide set of data sources and provides trusted, third party bid and ask prices of all derivatives that accurately reflect the real interdealer bank market prices for options, helping both the sell- and buy-side obtain access to the fair price of derivatives.
Dr David Gershon, SD CEO, comments: “In these extremely volatile markets we are seeing a renewed focus from both existing and new customers on cost control, risk management and price transparency. These have long been key components of our derivatives offering.
“In this environment SD offers a very appealing concept to our clients. For the front and middle office we offer a low-cost, subscription-based ‘software as a service’ solution that covers all the work flow including on line execution of derivatives and helps the sales desk increase productivity via our richest marketing tools.
“For the back office we offer both independent portfolio valuation with our exceptionally accurate model and very dense volatility surfaces to feed into their risk management systems. It has been very apparent that all standard models have failed to price accurately enough the derivatives market in this environment and our models have remained the only reliable solution.”
SD provides an independent benchmark for derivatives and its clients includes the majority of the major banks around the world that trade derivatives, as well as hedge funds, corporations, the big four auditors, brokers and central banks.
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