SIX Telekurs applies quantitatively-oriented methods along with a broad range of market-based inputs and comparisons to provide daily or intraday prices for securities that are not quoted and cannot be priced using standard valuation methods.
Within this context, transparency in evaluated pricing is commonly cited as an elusive and difficult to define concept. In an effort to coalesce conversations about transparency, SIX Telekurs has published a white paper intended to offer a clear and practical definition of what transparency means within the context of our own Evaluated Pricing service.
âIn the more tightly regulated post-crisis environment, it isnât enough to simply describe a methodology. Customers also need to understand the details of the inputs and assumptions that are used, especially when the instruments being evaluated are complex, distressed and/or truly illiquid, as is the case today with many structured productsâ said Perry Beaumont, Head of Evaluated Pricing Research & Development for SIX Telekurs.
Beaumont continued, âAt a minimum, SIX Telekurs is happy to offer a copy of our Methodology Document, and we are always open to providing reference documents that may help our clients understand the particular valuation processes we use. But perhaps even more importantly, when clients need more, we are always open to in-depth discussions that will help both parties understand and appreciate the nuances of a particular approach or even of a specific valuation.â
The SIX Telekurs Evaluated Pricing service employs a patented pricing methodology that allows us to reverse-engineer the most complex structures, which means we can value distressed securities across the full spectrum â from commercial paper to straight bonds to complex structured instruments. The service covers a wide range of asset classes, including fixed income, equities, commodities, precious metals and foreign exchange, and provides comprehensive documentation such as key pricing parameters and consistent valuation methodologies.
To sum up the companyâs approach to transparency in evaluated pricing, Ian Blance, Head of Evaluated Pricing Business Development for SIX Telekurs said, âWe view transparency as an ongoing evolution of processes and methodologies that are continuously subject to evaluation and review in order to make them more meaningful and ultimately more accountable to client needs.â