Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related solutions, today announced that its valuations service for complex OTC derivatives and structured products, offered in conjunction with Prism Valuation, is now being used by more than 25 major international financial institutions. A wide range of institutional clients around the globe, including custodians, asset managers, hedge funds and sell-side firms, subscribe to this valuations service, which offers a high level of transparency and broad coverage. Transparency reports provide a breakdown of the method used to achieve a given valuation for each deal, including a detailed discussion of the models and calibration strategies selected. This level of transparency can help clients comply with current regulatory and auditing demands. In addition, the service offers a discrepancy analysis, which can help a client understand the variations that arise from different valuations of an instrument, by comparing the client’s in-house valuation with the independent valuation, and concluding with an opinion of the maximum valuation deviation for that product. Valuations are available based on a wide range of underlyings including interest rates, FX, inflation, equities, credit, commodities and hybrids, and can be requested by the client on a per instrument basis. The service, tailored to clients’ needs, can provide valuations for most flavours of OTC derivatives and complex securities, and new structures – such as loans issued under the Term Asset-Backed Securities Loan Facility (TALF) – are continually being added. Anthony Belcher, director, European Fixed Income, Interactive Data, commented: "Clients welcome the transparency that we are able to offer, as well as the flexibility of our service and the breadth and depth of our coverage. There has often been a high degree of uncertainty when performing valuations of complex instruments. We work with clients to mitigate this uncertainty by helping ensure that the service we offer helps to meet their obligations from the valuation, associated values and delivery standpoints. The service can also help firms perform functions such as independent price verification (IPV), product control and compliance. We aim to help customers meet their mark-to-market pricing requirements, while enabling them to understand the associated risks and sensitivities.”
Interactive Data has decades of experience in providing independent fixed-income evaluated pricing and is a recognised leader in the market. Interactive Data's teams of evaluators operate in three major time zones to evaluate approximately 2.8 million fixed-income and international equity issues every day, covering a broad range of instruments that include global asset-backed securities (ABS), mortgage-backed securities (MBS) and collateralised mortgage obligations (CMOs). Independent valuations for a broad range of alternative investments are also available. Over 5,000 financial institutions in over 50 countries, including central banks, investment banks, major mutual and investment fund companies, subscribe to Interactive Data's evaluated prices.About Interactive Data Corporation Interactive Data Corporation (NYSE: IDC) is a trusted leader in financial information. Thousands of financial institutions and active traders, as well as hundreds of software and service providers, subscribe to our fixed income evaluations, reference data, real-time market data, trading infrastructure services, fixed income analytics, desktop solutions and web-based solutions. Interactive Data’s offerings can help clients around the world with mission-critical functions, including portfolio valuation, regulatory compliance, risk management, electronic trading and wealth management. Interactive Data is headquartered in Bedford, Massachusetts and has more than 2,400 employees in offices worldwide. Pearson plc (NYSE: PSO; LSE: PSON), an international media company, is Interactive Data’s majority stockholder. Pricing, evaluations and reference data are provided in the US through Interactive Data Pricing and Reference Data, Inc. and internationally through Interactive Data (Europe) Ltd. and Interactive Data (Australia) Pty Ltd. Valuations for OTC derivatives and structured products, and TALF loans are provided by Interactive Data through an agreement with Prism Valuation. For more information about Interactive Data please visit: www.interactivedata.com About Prism Valuation Prism Valuation was founded in 2006 to provide independent valuation and risk management services for customers’ deals covering all major asset classes. Prism Valuation has a team of senior people, each with many years’ direct and extensive experience on the trading floors of leading international structured products dealers. This core knowledge base is supported by a team of high-calibre associates, each highly skilled in financial engineering and computer modelling.
Prism Valuation’s strategy in providing services is to replicate the pricing and risk analysis capabilities of a structured products dealer. In this spirit, a bottom-up approach is taken, in which the valuation quant teams independently analyse original deal documentation (deal termsheet, confirm or prospectus) and then decide on the required market data, appropriate models and relevant calibration strategies most suitable for valuing a given deal.