SimCorp has incorporated a new module, XpressInstruments, into its market leading investment management system, SimCorp Dimension, bringing major new benefits to users of the system.
Significantly reducing operational risk, XpressInstruments dramatically cuts the time taken to introduce structured products and exotic instruments to the system and then supports them throughout its seamless environment, to include middle and back office processes.
XpressInstruments addresses well-recognised operational risks that currently exist with the growing use of these forms of derivatives. Due to the non-standardised structures of these products, which often have a relatively short life span, they typically have been managed on external spreadsheets
or on a home-grown/in-house developed system. These lack transparency and require a considerable amount of manual input to manage lifecycle events and to view exposure within a broader portfolio.
With XpressInstruments, specialised products can be added to SimCorp Dimension in just a few days or weeks, instead of months or even years. New instruments can be added at any time, with the support of SimCorp. Once in the system the robust support processes for middle and back offices are inherent.
By using SimCorp Dimension with XpressInstruments, structured products and exotic instruments can be handled and managed in the system in the same way as standard exchange traded and OTC products. Because SimCorp Dimension provides enterprise-wide seamless processing, based on a core database, all investment instruments are handled in a consistent way throughout the system. As a result, SimCorp Dimension maintains complete coverage of all holdings as well as profit and loss calculations.
As part of SimCorp Dimension, XpressInstruments utilises the system's core database, eliminating the need to re-key data and to consolidate or reconcile information between disparate internal systems. Instruments' events are handled automatically, including fixings, payments and exercise and choice decisions.
The specialised products and exotic instruments can readily be valued using multiple market tested pricing and valuation models already contained within SimCorp Dimension. When new pricing models are added to the system, they can immediately be utilised to price existing instruments.
"Currently, there is tremendous growth in the use of structured products and exotic instruments, which are designed to meet specific investment objectives," says Kjell Johan Nordgard, Senior Vice President of Market Support for SimCorp. "By introducing the XpressInstruments module to SimCorp Dimension, we aim to remove high levels of operational risk and challenges that investors in these products have had to endure in the past."
Separately, SimCorp and French software provider LexiFi have entered into an agreement to integrate LexiFi's financial instrument modelling technology into SimCorp Dimension. The LexiFi technology will allow SimCorp to more rapidly deliver complete and flexible solutions for complex financial instruments to its customers.
"We are very pleased with the cooperation," says Jørgen Vuust Jensen at SimCorp. "The LexiFi software fits perfectly with SimCorp Dimension and allows us to keep up with the innovation of new financial instruments. The resulting functionality is released with SimCorp Dimension version 4.3."
LexiFi is equally happy with the agreement. "The cooperation will allow us in a much better way to market our advanced solutions and put them into practice in an enterprise solution such as SimCorp Dimension," says Philippe Lecocq at LexiFi. "We look forward to our further collaboration."
In addition, the agreement introduces cooperation between the two companies to develop further unique functionality to the benefit of all their clients in the financial industry.