The collaboration, which is subject to final contract, includes two elements: integrated data for managing OTC derivatives using SD's market leading volatility surfaces and Algorithmics' award winning risk analytics for all asset classes and instruments.

Algorithmics' clients can benefit by integrating SD's data into Algorithmics' full valuation framework and thereby isolating volatility as a risk factor more effectively. In turn, SD's clients can benefit by utilizing Algorithmics' risk analytics.

The combined services of Algorithmics and SD gives both buy and sell-side derivatives trading institutions an industry standard, market-calibrated risk reference data for foreign exchange, commodities, energy, equities, interest rates and credit derivatives. This data is then fed into a market leading and flexible risk solution with the widest range of products and structures, together with powerful and proven VaR and other risk management measures.

Dr David Gershon, CEO, SD, comments: "We are seeing a renewed focus from both existing and new customers on transparency, accuracy, cost control and risk management. These have long been key components of our derivatives offering and working with Algorithmics will help us to complete the service we can offer while expanding our client base significantly."

Dr Andrew Aziz, Executive Vice President, Risk Solutions, Algorithmics, says: "Both our and SD's customers will benefit from the integration of SD's respected benchmark volatility data with our award-winning risk analytics systems. This alliance strengthens our ability to meet market demand for the most innovative and effective risk management tools for cross-asset derivatives and we look forward to exploring more collaborative ways to work together with SD."