About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

OTC Val Adds Valuation Capabilities for Hard to Value MBS and ABS Securities

Subscribe to our newsletter

OTC Valuations (OTC Val) has increased its valuation capabilities of illiquid mortgage backed securities, commercial paper, collateralised debt obligations, and other asset backed products. Bob Sangha, managing director at the vendor, explains that as well as providing a price, OTC Val is also focused on providing data on the modelling behind the price for these complex products.

According to analysis by the Market, Credit, and Risk Strategies group of Standard and Poor’s, Level 3 assets rose 15.5% from the second quarter. OTC Val contends that many of these securities are being reclassified as Level 3 assets as holders cannot rely on broker quotes or quotes without the level of price transparency required for financial reporting purposes.

It is therefore claiming to address these data issues via its valuation process, which it says is based on proven fair value estimation and model-based techniques. The vendor indicates that clients can use these techniques to satisfy audit and internal risk compliance requirements for securities with no direct market observable prices.

Sangha explains: “In this environment, market participants are as concerned about the assumptions and data behind a product’s price as the price itself. Our valuation methods enable us to provide the required level of transparency and disclosure. In addition, we employ a variety of reasonableness tests to ensure consistency and accuracy, while utilising (FAS 157 Level II) observable market inputs where possible. We also follow the recommendations from the IASB Expert Advisory Panel’s recent publication titled Measuring and Disclosing the Fair Value of Financial Instruments in Markets that are No Longer Active.”

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Best practice approaches to data management for regulatory reporting

13 May 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes Effective regulatory reporting requires firms to manage vast amounts of data across multiple systems, regions, and regulatory jurisdictions. With increasing scrutiny from regulators and the rising complexity of financial instruments, the need for a streamlined and strategic approach to data management...

BLOG

Euronext Sees Research Growth Opportunity in Substantive Research Acquisition

Technology has redrawn how investors obtain and buy research, and for many the new landscape is forcing them to reassess their requirements and their tech spend. With more financial regulations on the horizon expected to add yet more complexity to market participants’ research operations, European stock market operator Euronext has seen an opportunity to provide...

EVENT

Future of Capital Markets Tech Summit: Buy AND Build, London

Buy AND Build: The Future of Capital Markets Technology London on September 19th at Marriott Hotel Canary Wharf London examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

Regulatory Data Handbook 2024 – Twelfth Edition

Welcome to the twelfth edition of A-Team Group’s Regulatory Data Handbook, a unique and useful guide to capital markets regulation, regulatory change and the data and data management requirements of compliance. The handbook covers regulation in Europe, the UK, US and Asia-Pacific. This edition of the handbook includes a detailed review of acts, plans and...