SuperDerivatives, a derivatives benchmark and multi asset front office system, has entered into a memorandum of understanding with Algorithmics, a provider of risk solutions, to offer banks, funds and asset managers a solution to improve their risk management capabilities.
The collaboration, which is subject to final contract, includes two elements: integrated data for managing OTC derivatives using SD’s volatility surfaces; and Algorithmics’ risk analytics for all asset classes and instruments.
Algorithmics’ clients can benefit by integrating SD’s data into Algorithmics’ full valuation framework and thereby isolating volatility as a risk factor more effectively. In turn, SD’s clients can benefit by using Algorithmics’ risk analytics.
The combined services of Algorithmics and SD gives both buy and sell-side derivatives trading institutions a risk reference data for foreign exchange, commodities, energy, equities, interest rates and credit derivatives. This data is then fed into a risk solution with a range of products and structures, together with VaR and other risk management measures.
David Gershon (pictured), chief executive of SuperDerivatives, says: “We are seeing a renewed focus from both existing and new customers on transparency, accuracy, cost control and risk management. These have long been key components of our derivatives offering and working with Algorithmics will help us to complete the service we can offer while expanding our client base significantly.”
Andrew Aziz, executive vice president, risk solutions, Algorithmics, says: “Both our and SD’s customers will benefit from the integration of SD’s respected benchmark volatility data with our award-winning risk analytics systems. This alliance strengthens our ability to meet market demand for the most innovative and effective risk management tools for cross-asset derivatives and we look forward to exploring more collaborative ways to work together with SD.”