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Interactive Data’s OTC Derivatives Valuations Service Now Used By Wide Range Of Financial Institutions

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Interactive Data Corporation, a provider of financial market data, analytics and related solutions, today announced that its valuations service for complex OTC derivatives and structured products, offered in conjunction with Prism Valuation, is now being used by more than 25 major international financial institutions.

A wide range of institutional clients around the globe, including custodians, asset managers, hedge funds and sell-side firms, subscribe to this valuations service, which offers a high level of transparency and broad coverage. Transparency reports provide a breakdown of the method used to achieve a given valuation for each deal, including a detailed discussion of the models and calibration strategies selected. This level of transparency can help clients comply with current regulatory and auditing demands. In addition, the service offers a discrepancy analysis, which can help a client understand the variations that arise from different valuations of an instrument, by comparing the client’s in-house valuation with the independent valuation, and concluding with an opinion of the maximum valuation deviation for that product.

Valuations are available based on a wide range of underlyings including interest rates, FX, inflation, equities, credit, commodities and hybrids, and can be requested by the client on a per instrument basis. The service, tailored to clients’ needs, can provide valuations for most flavours of OTC derivatives and complex securities, and new structures – such as loans issued under the Term Asset-Backed Securities Loan Facility (TALF) – are continually being added.

Anthony Belcher, director, European Fixed Income, Interactive Data, commented: “Clients welcome the transparency that we are able to offer, as well as the flexibility of our service and the breadth and depth of our coverage. There has often been a high degree of uncertainty when performing valuations of complex instruments. We work with clients to mitigate this uncertainty by helping ensure that the service we offer helps to meet their obligations from the valuation, associated values and delivery standpoints. The service can also help firms perform functions such as independent price verification (IPV), product control and compliance. We aim to help customers meet their mark-to-market pricing requirements, while enabling them to understand the associated risks and sensitivities.”

Interactive Data has decades of experience in providing independent fixed-income evaluated pricing and is a recognised leader in the market. Interactive Data’s teams of evaluators operate in three major time zones to evaluate approximately 2.8 million fixed-income and international equity issues every day, covering a broad range of instruments that include global asset-backed securities (ABS), mortgage-backed securities (MBS) and collateralised mortgage obligations (CMOs). Independent valuations for a broad range of alternative investments are also available. Over 5,000 financial institutions in over 50 countries, including central banks, investment banks, major mutual and investment fund companies, subscribe to Interactive Data’s evaluated prices.

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