GlobeOp Packages UCITS lll OTC & Risk Solution for Mutual Funds, Custodian Banks

22 November 2007

GlobeOp Financial Services is launching an integrated UCITS lll outsourcing solution for mutual funds and custodian banks that provides independent daily valuation and risk reporting for over-the-counter (OTC) derivatives. The GlobeOp solution enables mutual funds to more quickly take advantage of derivative market opportunities by resolving trade processing infrastructure challenges and responding to the regulatory requirements of the European Union's UCITS III directive.

“GlobeOp is ideally suited to support mutual funds and custodian banks interested in benefiting from UCITS lll, because we now value or process more than 1300 trades daily, averaging approximately 230,000 open positions in more than 60 types of distinct OTC derivative products. This represents approximately 3% of the global daily OTC derivative trading volume,“ said Ron Tannenbaum, global head of sales and marketing at GlobeOp.

“As many mutual funds and custodian banks are now learning, the complexity and volume of OTC trades create additional stress on internal trade processing systems, compounded by UCITS lll requirements for independent and daily valuations and risk analytics. Many funds and custodian banks simply do not have the robust, scalable infrastructure needed to take advantage of derivative market opportunities quickly. Our tailored UCITS lll service package combines GoOTC ™ and GoRisk ® Reports, two well-established services, which offer independent, transparent, web-based valuations, document & collateral management, settlement and daily risk reporting. Although funds are ultimately responsible for regulatory compliance, our UCITS lll solution greatly increases their ability to focus on generating returns, while benefiting from a proven, scalable infrastructure and reduced technology-related investment.”

A highly automated, ‘plug and play’ solution for OTC processing, GoOTC incorporates standardized data and processes to reduce operational and settlement risks related to inaccurate trade entry, reconciliation and liquidity. In addition, GoOTC provides online access to critical data for fund risk managers and financial control teams. To help funds demonstrate their ability to monitor and measure position and portfolio risk whenever necessary, as required by UCITS lll, GoRisk Reports provides a comprehensive ASP risk reporting service. Reports, that can be tailored to specific fund requirements, include: position, liquidity and exposure; scenario analysis and stress test limits; correlation analysis; and VAR.

Tannenbaum also noted that GlobeOp’s UCITS lll package can be enhanced with the addition of GoQuote ™, a web-based front-end pricing consolidation service for illiquid, manually priced OTCs. GoQuote enables OTC derivatives traders to efficiently view, manage and analyze formatted electronic price messages and bid/offer spreads on a single, user-specific grid. GoQuote can be refreshed in real-time, enabling traders to identify new opportunities and understand changing risk exposure.

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