JPMorgan is to begin beta testing a new ASP-based service, MorganRisk, that will enable buyside clients to gauge market risk in their own investment portfolios using the bank's proprietary methodology.
JPMorgan says the new service eliminates the need to purchase expensive risk management software and source market data to drive models.
As an applications aervice provider (ASP), MorganRisk will host risk software for use by clients. Clients will provide their position or transaction feeds to MorganRisk, which will measure the risk exposures using the firm's proprietary full-revaluation VaR and stress testing methods in addition to sensitivity analysis.
After a beta testing introduction beginning in July, JPMorgan says it will offer the package to its clients across several different service levels, from a simple set of risk exposure reports on a pre-determined schedule to on-demand reporting and on-line analysis for a number of users.
John Phinney, senior vice president and JPMorgan information products executive says the new service will complement the growing suite of pre-trade, trade and post-trade tools being offered by JPMorgan Investor Services to its asset management, plan sponsor and broker dealer clients. He adds: "Our clients will have the advantage of examining multiple ways to optimise portfolio returns by looking at various risk and transaction cost scenarios."
Initially, the instruments covered by MorganRisk will include equities, vanilla equity derivatives, fixed income, vanilla interest rate and foreign exchange derivatives, commodity derivatives and most mortgage-backed securities. Post launch, the coverage will expand to include non-vanilla derivatives.