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Volume 3. Issue Number 3 These new capabilities provide clients with links into BondEdge that can help them perform detailed trade analysis via a bond-swap and portfolio “what-if” tool. “Buy and sell” bond trade programs can be assessed on both a market and book value basis, and the effects on existing client portfolios can be directly measured. With the new API, Interactive Data will provide comprehensive technical and user documentation. These new capabilities are bundled with BondEdge Next Generation Release 2.1, which is currently available. “The addition of this API to BondEdge will broaden access to the robust fixed income analytical measures and trade analysis that have benefited our clients for decades,” said Keith Webster, managing director, Interactive Data Fixed Income Analytics. “This new capability demonstrates our commitment to providing BondEdge clients with increasingly automated, efficient and flexible methods of utilizing BondEdge to support their activities, including risk management and more comprehensive portfolio analysis.” CityIQ, a leading advisor to the securities industry, announced the launch of a new integration benchmark for asset managers. Announcing the new service Paul Wiltshire, Managing Director of CityIQ, explained: “Asset Managers invest significant amounts of resources and budgets to integrate systems. Usually, these costs are generally incorporated within larger projects making it difficult to undertake objective analysis of the benefits of a particular integration approach”. “Until now there have been no generally available benchmarks against which organisations can compare their individual approaches to integration. That changed last year, when CityIQ benchmarked the integration capabilities of a representative group of asset managers”. “Most of the benchmarking services on offer today operate at too high a level to provide genuine insight. For this exercise, the work was done at a very detailed level, using a small set of pre-defined scenarios, relevant to all organisations involved”. “As a result we now have a base set of data that we can use to help organisations in the asset management industry benchmark their integration capabilities.” StatPro Group plc, a leading provider of portfolio analytics and data solutions for the global asset management industry, is urging the investment community to respond swiftly to the GIPS Executive Committee’s new draft standards. The governing body of GIPS has published its draft for the 2010 Global Investment Performance Standards and is seeking comment and feedback before 1st July 2009. Commenting on the draft standards, Chairman of StatPro Group plc and chair of the GIPS Verification/Practitioner Subcommittee, Carl Bacon said: “Provisions that are no longer necessary have been eliminated and new provisions added to promote best practice, as well as quite a number of cosmetic changes. I encourage the investment community to respond swiftly as further changes are still possible. Firms will need no encouragement to comment on issues they dislike, but it’s equally important that they comment on issues that have their full support. It is entirely possible for the Executive Committee to make changes in response to a vocal minority if the contented majority remain silent.” The most significant revisions are: 1) Fair value - firms will be required to value all portfolios at fair value – valuation guidelines are included in a new appendix. 2) Risk measures - firms will be required to disclose a three-year annualised ex-post standard deviation of the composite and benchmark using monthly data. 3) Compliance statement - there will be three forms of the compliance statement, disclosing if the firm is verified, verified in the past, or not verified. Firms will be given 24 months to keep their verification current. The GIPS Executive Committee plans to issue a final document in early 2010 with an effective date of 1st January 2011. It is likely that there will be no more major changes after this date for at least five years. 11
Volume 3. Issue Number 3 Markit, a financial information services company, announced the launch of the first multi-bank, cross-asset client valuations platform. The initiative was first announced in February last year. Markit Valuations Manager provides a secure, standardised view of over-the-counter (OTC) derivative positions and derivative and cash instrument valuations across counterparties on a single electronic platform. Subscribers to Markit's Portfolio Valuations service will be able to view the bank counterparty valuations alongside Markit's independent valuations. Currently, portfolio managers receive numerous statements from their counterparties in multiple formats, requiring many hours of manual consolidation. A recent survey of 50 asset managers conducted by Markit highlights the urgent need for an electronic, secure valuations process: - 17% of respondents said that a single file delivery of counterparty statements would save them between 50 and 1,000 hours of work a month. On average, respondents estimated time savings of more than 49 hours a month. - More complete position information and a standard statement format across all counterparties ranked as the most important improvements required, followed by an efficient price challenge mechanism. - 66% of respondents said they received their counterparty statements by email, underlining the potential security risk of misplaced or incorrectly forwarded emails. - Over 65% of respondents said they were under pressure to conduct more frequent reconciliation with counterparties and provide more frequent NAV computation to investors. The new platform incorporates a dispute mechanism and workflow tools with full audit trail to enhance the price challenge process. Markit Valuations Manager is integrated with Markit's Trade Processing PortRec service to enable full life cycle support for OTC derivative positions including counterparty position data delivery, normalisation [1], reconciliation and valuation. "We support this Markit-led initiative and expect to realize increasing operational gains and cost efficiencies as more firms join the platform. The ability to use Markit Valuations Manager in conjunction with their PortRec service will also be a significant benefit for us," said Peter Barsoom, Deputy COO of BlueMountain Capital Management LLC in New York. "As an active member of several buy-side working groups in Europe, we welcome the ability to access normalised position and valuation data from the banks in a standardised way. Markit has not only delivered the normalisation, but it is it is consolidating the information in a single electronic portal across banks. I think this is a great step forward for the industry," says Patrick Finn, Head of Operations at BlueCrest Capital Management LLP in London. David Lefferts, Managing Director of Markit Valuations Manager, said: "Financial market participants and their regulators are acutely aware of the need for reliable, independent counterparty position and valuation information for OTC derivatives and cash securities. We are pleased to be launching Markit Valuations Manager after twelve months of research and development, working closely with buy-side and sell-side players. We look forward to bringing considerable efficiencies to our clients' valuation processes." Markit is launching the platform with six banks - Bank of America Merrill Lynch, Citi, Credit Suisse, Goldman Sachs, J.P. Morgan and UBS - and expects to add additional participating banks over the coming months. Interactive Data Corporation, a leading provider of financial market data, analytics, and related services, announced that its Fixed Income Analytics business has released BondEdge® Fixed Income Strategist, a new package of capabilities designed for the analytical risk reporting and trade analysis needs of fixed income strategists focused on serving institutional investors. Fixed income strategists and their teams can use this offering in their efforts to gain insight into client portfolios, identify new trading opportunities, analyze risk characteristics of the portfolios, and seamlessly share consistent information with groups across their enterprise. BondEdge Fixed Income Strategist is available via the BondEdge Next Generation Platform, which is built on the Microsoft® .NET Framework and provides a highly intuitive, flexible user interface. As a result, this platform is well suited to address the evolving and demanding analytical and reporting requirements of fixed income strategists. It delivers a comprehensive suite of analytical and reporting tools that include 12
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