Northern Trust announced today that it has enhanced its platform for processing over-the-counter (OTC) derivatives to provide daily independent pricing for structured products and other bespoke instruments. The expanded capabilities, including transparency reporting for OTC instrument types, were developed through a strategic alliance with Numerix, a leading derivative and structured products valuation and analytics company.
"The derivatives industry, regulators, investors and our clients globally are demanding increasing independence and transparency for OTC derivative valuations," said Peter Cherecwich, chief operating officer for Corporate & Institutional Services at Northern Trust. "Derivatives perform critical functions for investment managers and institutional investors, and our global alliance with Numerix brings a range of valuation capabilities and depth of knowledge to help our clients exercise greater control over valuation of these assets while meeting the standard for transparency demanded by sophisticated investors."
The enhancements allow Northern Trust to independently price exotic OTC derivative instruments and provide clients access to the mathematical model, calibration techniques and market data components of the pricing process to enable fully transparent reporting.
Specifically focused on hedge funds, investment managers and institutions requiring daily independent pricing for structured products, these capabilities are delivered to clients globally through Northern Trust's integrated derivatives processing platform. In addition, Numerix financial engineers work alongside the derivative pricing teams at Northern Trust operation centers throughout the globe to provide clients with access to the highest level of valuation support.
Numerix is a leading independent analytics provider for derivatives and structured products and currently performs more than two million valuations per year. Numerix pricing models and software solutions are utilized by global issuing institutions and are embedded in the world's most prominent trading and risk platforms.
"We are excited about this relationship with one of the top financial services firms," said Steve O'Hanlon, CEO/President at Numerix. "Through this alliance, Northern Trust will offer its clients the benefits of independent valuations, innovative transparency reporting and access to expertise that is unrivalled in the industry."
