So far this year, Bear Stearns was absorbed by JP Morgan, UBS closed its municipal bond division, JP Morgan ended its municipal derivatives practice, Merrill Lynch was purchased by Bank of America and Lehman Brothers went bankrupt. These unexpected events make it even more important for clients to use an independent calculation agent for their derivative calculations. This includes both market valuation and ongoing payments.
DerivActiv performs daily mark-to-market valuations and validates cashflows for more than 700 users. âOur experience is that payment calculation errors occur frequently, often at the expense of our client,â said Johan Rosenberg, President of DerivActiv. âWe find the mistakes, point them out to the swap dealer and help our clients recover any lost amounts.â In addition to recovering payments, DerivActiv analyses are used in the rebate calculations of tax-exempt bond issues to ensure that the report is accurate.
To address the desire for independence and transparency in the derivatives marketplace, DerivActiv is committed to working with all users of derivative instruments including: non-profit hospitals and educational institutions, governments, corporations, hedge funds, accounting firms, trustees and dealer counterparties.
DerivActiv will provide an independent review of the past 12 months of payments for all types of derivatives, including plain vanilla swaps, swaptions, knock-outs, CMS swaps, equity swaps, foreign currency swaps, range accrual swaps and other exotic derivative structures.