Interactive Data Corporation, a provider of financial market data, analytics and related services, signs an agreement between its Pricing and Reference Data business and Prism Valuation. Under the agreement, Interactive Data Pricing and Reference Data will now have the capability to provide valuations of highly complex OTC derivatives and structured products as part of its wide-ranging pricing and evaluation services.
The Prism Valuation team emulates the valuation processes of a typical structured products dealer by synthesizing the most important components required for valuation and analysis: up-to-date market data, appropriate valuation models and targeted calibration strategies. The service that Interactive Data will offer includes valuation transparency reports that provide a breakdown of the method 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.
Prism Valuation has a core team with many years of direct front office and quantitative experience at structured products dealers. In addition, Prism Valuation’s strategic partnerships include ICAP, the interdealer broker, which provides underlying market data, and NumeriX, one of the global providers of cross asset pricing and risk analytics for exotic derivatives and structured products. As part of this strategic alliance, Interactive Data has purchased a minority ownership stake in Prism. Financial terms of the investment were not disclosed.
“We are delighted to enter this relationship with Interactive Data, which has many years of experience in evaluated pricing, and extensive global distribution channels,” says Greg Cripps, president and CEO, Prism Valuation. “We look forward to offering our independent valuation services of complex products via Interactive Data, and delivering valuations and risk analysis transparency to help customers further adapt to an increasingly regulated global business environment.”
“Financial institutions continue investing in new, ever more complex financial instruments in order to help achieve portfolio diversification, hedge risk, optimize performance and drive growth,” says Roger Sargeant, managing director, Interactive Data (Europe) Ltd. “As part of our ongoing strategy to address our customers’ evolving needs, we continue to expand the breadth and depth of our coverage by adding pricing and valuations of more complex, esoteric structured products. Given the current credit and trading conditions, our relationship with Prism Valuation will help customers meet their mark-to-market pricing obligations as well as the demands of credit and risk management, and portfolio management.”
D.C.