Toronto-based vendor Algorithmics is working with IBM to develop and implement a portfolio and risk management system for China's Guotai Junan Securities.
The vendors say the platform will be used by Guotai Junan Securities for security trading and fund management.
The project will utilise IBM's Risk Management Framework services - including how to optimally set limits for traders, trade index options, and trading operations structures - along with Algorithmics' Algo Risk software.
Colin Lawrence, IBM's China risk management leader, IBM, says the system will ensure that "Guotai Junan Securities will be able to explore alternative short-long strategies and be in excellent shape to do programmed trading once the equity index starts trading on the Shanghai Exchange".
Zuo Feng, chief compliance officer, Guotai Junan Securities, says: "Risk management, internal control and compliance will be some of the most important business developments in the Chinese securities industry in the years to come. To compete in this environment, Guotai Junan Securities needs to speak the international language of risk management."
IBM and Algorithmics have also disclosed that they are forming an alliance in China focusing on market and counterparty risk as well as collateral management. The two companies will offer financial services firms in the country Algorithmics software and systems integration and consulting services.