Nasdaq Launches XVA Accelerator for Enhanced Risk Modelling

Nasdaq has unveiled a new machine learning-driven methodology for conducting risk calculations and generating predictive analytics for investment portfolios. The innovative functionality will be integrated into Nasdaq’s Calypso platform, widely used by banks, insurers, and other financial institutions to access capital markets, manage risk, and comply with regulatory reporting requirements.

The new system, XVA Accelerator, is designed to address the increasing complexity of derivative pricing models, particularly the computationally intensive process of calculating Value Adjustments (XVA) in over-the-counter (OTC) derivatives trading. These adjustments, which include Credit Valuation Adjustments (CVA), account for the risk, funding, and capital costs inherent in such transactions. Nasdaq’s solution employs advanced machine learning alongside mathematical modelling to significantly improve the speed and efficiency of these calculations.

At the core of the XVA Accelerator is a technique based on Chebyshev Tensors, developed in collaboration with MoCaX Intelligence. This patented approach allows for the rapid convergence of scenario-based risk assessments, reducing the time and computational power required for the most complex calculations by up to 100-fold. This enhancement is critical as banks face rising regulatory demands, such as those introduced under Basel III Endgame, which require more granular risk assessments and frequent intraday recalculations.

The technology enables financial institutions to run risk models across millions of scenarios with fewer computational resources, reducing both the physical infrastructure and energy requirements typically associated with such processes. This is especially valuable during periods of market volatility, allowing firms to quickly adjust to changing conditions without sacrificing accuracy or transparency.

By streamlining risk calculations and enhancing the ability to model complex derivatives, the XVA Accelerator empowers financial institutions to better manage risk, optimise trading strategies, and reduce operational costs. As part of Nasdaq’s broader Calypso platform, it reflects the company’s commitment to advancing industry-wide modernisation and operational efficiency across global financial markets.

MDXT Acquires UK Spreadsheet Optimiser Schematiq

MDX Technology (MDXT), a provider of data distribution and collaboration technology to financial institutions, has acquired spreadsheet optimisation technology firm Schematiq, creating a platform that it says lets clients share data and models faster and more efficiently.

Recognising that the financial industry still relies heavily on spreadsheets to organise and manage their data, MDXT said that the acquisition will help clients of the London-based company convert their models into code and APIs that can be scaled for trading and enterprise uses.

“Despite industry-wide efforts to reduce reliance on Excel, it is still critical to operations and our customers are looking to us to support them scale invaluable IP held in these complex models,” said MDXT chief executive Nigel Someck.

The deal was approved for an undisclosed sum.

MDXT’s low-code platform is used by financial institutions, including HSBC, and financial services companies such as Bridgewater and Intercontinental Exchange (ICE Data Services) to build over-the-counter price-sharing and trading workflows.

The newly augmented company will continue to be headed by Someck while Schematiq founder Darren Harris has been appointed as chief product officer.

“This collaboration is not just a strategic fit for both companies but a transformative move for the entire industry,” said Harris. “Together, we will drive innovation, expand market influence, and deliver exceptional value to our clients. The future is incredibly exciting.”

Amberdata Partners with Thalex to Enhance Crypto Derivatives Analytics

Amberdata, the digital asset data and analytics provider, has entered into a partnership with Thalex, the crypto options, perpetuals, and futures exchange. The collaboration integrates Amberdata’s blockchain and crypto asset data with Thalex’s derivatives trading platform. As part of the partnership, Thalex will enhance its user experience by offering real-time analytics, including BTC and ETH volatility curves, term structure, open interest, and more.

The new “Statistics” tab on Thalex will provide users with exclusive access to insights powered by Amberdata, aiming to enrich the trading experience as the DeFi derivatives market continues to grow.

Greg Magadini, Director of Derivatives at Amberdata, commented: “Partnering with Thalex provides us the opportunity to show traders the vast amount of strategies available in the option markets. Having a good platform to execute on combined with solid analytics is all a trader needs to find lucrative trade structures in the nascent crypto volatility market.”

Hendrik Ghys, CEO and Co-Founder of Thales, added: “This is a natural collaboration. Amberdata positions traders to take views on volatility. Thalex enables traders to turn such views into positions. We’re excited about this extension of our partnership which brings market data visualizations powered by Amberdata to our user interface.”

S&P Global Unveils Scientist-led Climate Research Group

S&P Global has established a Climate Centre of Excellence, bringing together scientists and strategists to help guide the data and ratings company’s environment and nature research and methodologies.

The centre will harness the company’s market and ESG datasets to generate sustainability-linked information that can be used by clients of the company’s S&P Global Market Intelligence, S&P Global Ratings, S&P Global Commodity Insights, S&P Global Mobility and S&P Dow Jones Indices businesses.

“To push the frontiers in climate research, S&P Global scientists are diving into some of the most complex data and modelling challenges in the physical and economic sciences,” said the centre’s chief science officer Terence Thompson. “We are bridging multi-disciplinary gaps and perspectives to enable advancements in our science-driven methodologies providing actionable information on climate-related risks and opportunities.”

Among the themes the centre aims to tackle are physical and climate hazards, probabilistic risk modelling and supply-chain exposure.

DTCC Unveils Digital Launchpad to Accelerate Adoption of Digital Assets

The Depository Trust & Clearing Corporation (DTCC) has introduced the DTCC Digital Launchpad, a new industry sandbox designed to foster collaboration and accelerate the adoption of digital assets across financial markets. This open ecosystem will bring together market participants, technology providers, and other stakeholders to co-develop and pilot solutions that address key challenges such as data interoperability and liquidity.

With tokenised securities projected to reach $16 trillion by 2030, the DTCC Digital Launchpad aims to resolve industry fragmentation caused by conflicting standards and processes. The platform offers distributed ledger technology (DLT) infrastructure and scalable tools from DTCC’s Digital Assets suite, enabling firms to explore digital asset innovations without building their own systems. The initiative features two tracks: an Industry Launchpad for collective industry efforts and a Client Launchpad offering tailored support for firms to develop bespoke digital asset solutions.

Frank La Salla, DTCC President, CEO and Director, commented: “DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology. As an industry-owned and governed infrastructure for the world’s largest capital markets, DTCC is uniquely suited to drive industry collaboration under the banner of a larger goal: building a digital asset ecosystem that’s as safe and sound as the one we have for traditional securities today.”

Murex Partners with Kaiko to Enhance MX.3 Platform with Digital Asset Data

Murex, the capital markets technology provider, has formed a strategic partnership with cryptocurrency market data vendor Kaiko. This collaboration integrates Kaiko’s comprehensive digital asset insights into Murex’s MX.3 platform, enhancing its real-time portfolio management capabilities. MX.3 users can now more effectively value digital asset portfolios, assess market risks, and compare proprietary analytics with industry-leading data.

The combined expertise of Murex’s cross-asset platform and Kaiko’s cryptocurrency data aims to help financial institutions better manage risks and optimise strategies in the growing digital asset market. With over 300 clients globally and 60,000 daily users, MX.3 is poised to strengthen its role in both traditional and digital financial operations.

Solene Khy, Head of Product Management, Commodity, Equity, FX and Digital Assets at Murex, commented: “Digital assets are not like traditional assets. They have their own specificities in many respects. For market data sourcing and management, we believe that our partnership with Kaiko, a strategic crypto market data player, will help our clients in the development of their digital assets strategies. This will complement our digital assets offer with the right coverage of assets and curve structures to manage digital assets risk.”

Ambre Soubiran, CEO of Kaiko, added: “We’re thrilled to collaborate with Murex to facilitate real-time portfolio management. This partnership will extend the reach of our cryptocurrency market data and indices, providing substantial value to Murex’s global client base as they look to expand into the digital asset market.”

TS Imagine to Acquire PrimeOne from S&P Global, Enhancing Risk Management and Prime Brokerage Solutions

TS Imagine has entered into a definitive agreement to acquire PrimeOne, a provider of operational risk management solutions, from S&P Global. PrimeOne’s platform offers key services such as stock borrowing, lending, and margin management, which will complement TS Imagine’s existing technology. The acquisition will allow TS Imagine to provide a comprehensive solution combining prime brokerage infrastructure and real-time risk analytics, streamlining workflows and improving operational efficiency for clients.

The integration of PrimeOne’s tools with TS Imagine’s RiskSmart platform aims to enhance real-time risk monitoring by leveraging PrimeOne’s operational and financing data. Additionally, PrimeOne’s expertise in swaps will support the expansion of TS Imagine’s TradeSmart OEMS to cover more asset classes. The deal is expected to close next month, with product enhancements to follow shortly after.

ISDA Ops by Validus: Streamlining ATE and CSA Threshold Complexity

Validus Risk Management recently launched ISDA Ops, an advanced platform that simplifies the complex task of managing ISDA Additional Termination Events (ATEs) and Credit Support Annex (CSA) thresholds. By automating calculations and real-time monitoring, ISDA Ops addresses the intricate challenges financial institutions face with customized terms and vast data volumes, enhancing efficiency and reducing operational risk. 

The management and monitoring of complex ISDA ATEs and CSA thresholds present significant challenges owing to the intricate nature of the agreements and the sheer volume of data that needs to be tracked and analysed in real time. 

• Complexity of Customized Terms: ATEs allow parties to specify a nearly unlimited range of events that can trigger the termination of an ISDA Master Agreement. These can include credit-related defaults, significant declines in a fund’s net asset value (NAV), or incorrect tax representations. The highly customizable nature of these terms results in a complex mix of structured and unstructured data making standardization difficult and requiring bespoke solutions for monitoring each agreement. 

• Volume of Data Across Multiple Counterparties: Financial institutions often manage thousands of trading lines across numerous counterparties, each with their own specific ATEs and CSA Thresholds. Keeping track of these varied terms manually is not only time-consuming but also prone to errors, increasing operational risk. 

• Real-Time Monitoring Requirements: The dynamic nature of ISDA markets necessitates real-time monitoring of ATEs and CSA thresholds. Delays in identifying breaches or potential collateral calls can lead to undetected exposures and financial losses. 

• Complex Calculations for Collateral Management: CSA Thresholds determine the level of unsecured exposure tolerated before collateral is required. Calculating these thresholds accurately involves complex computations that factor in live market data, exposure levels, and specific contractual terms. 

• Regulatory Compliance and Risk Management: Regulatory frameworks demand stringent risk management practices, including the effective monitoring of counterparty risk and collateral adequacy. Failure to comply can result in regulatory penalties and reputational damage. 

ISDA Ops addresses these issues by providing an intelligent and scalable approach to constructing ATE and CSA Threshold conditions. The platform allows users to analyse and test conditions using live and forecasted data, enabling real-time, proactive decision-making. 

“Managing ISDA ATEs and CSA Thresholds has been a complex task for risk management teams,” said Alain Smith, Head of Client Engagement at Validus Risk Management. “ISDA Ops provides a clear, consolidated view of the data, helping users identify potential breaches and model future risks more effectively,” he said. 

Key features of ISDA Ops include: 

• Automated Tracking and Calculation: Automatically calculates and tracks ISDA ATEs and CSA Thresholds across all counterparties, streamlining risk management processes. 

• Real-Time Risk Management: Enables proactive decision-making by identifying potential collateral calls early, improving management of counterparty and liquidity risks. 

• Enhanced Reporting: Offers intelligent reporting tools that simplify tracking and updating ISDA terms, increasing transparency. 

• Scenario Analytics: Allows users to simulate potential future scenarios using live and forecasted data, proactively addressing potential risks. 

ISDA Ops integrates with Validus’s Horizon platform, including RiskView for hedging monitoring and reporting, TradeView for front-office hedging, and PortfolioView for portfolio-level risk management. This integration enables CSA Thresholds to be updated and monitored within RiskView and incorporates PortfolioView data for condition testing. 

Validus plans to deliver further enhancements to ISDA Ops before the end of the year, incorporating generative AI to efficiently parse complex language and improve data retrieval. Earlier in June, the company announced upgrades to TradeView, enabling automation of pre-trade checks. 

Bitnomial Exchange Implements Eventus Trade Surveillance

Bitnomial Exchange is implementing the Validus solution from trade surveillance and financial risk solutions provider, Eventus. The digital asset derivatives exchange has been collaborating with Eventus since 2021 to integrate order and execution flow for two major futures commission merchant (FCM) clients on the exchange. The decision to fully deploy Validus followed a comprehensive review of Bitnomial’s internal surveillance tools alongside external solutions. 

The move reflects the exchange’s commitment to robust oversight and maintaining and strengthening compliance and market integrity during a period of significant growth by expansion into new products and increasing trading volumes. 

“Integrating Eventus’s advanced surveillance technology with our proprietary systems reinforces our dedication to compliance and transparency,” said Michael Dunn, President of Bitnomial Exchange. “As we continue to grow, it’s crucial that we provide a secure and efficient trading environment for our clients.” 

Eventus CEO Travis Schwab noted the synergy between the two firms. “Bitnomial’s rapid expansion highlights the need for scalable surveillance solutions,” he said. “Our expertise in digital assets and regulatory compliance positions us well to support their evolving needs and uphold the integrity of their markets.” 

In the first half of 2024, Bitnomial reported over $130 million in notional value traded, marking a 1,081% increase from the same period in 2023. Founded in 2014, the Chicago-based exchange offers physically settled Bitcoin futures and options, providing a regulated platform for institutional and professional traders in cryptocurrency derivatives. Recent developments include the introduction of Hashrate futures in partnership with Luxor, targeting Bitcoin miners, and the Commodity Futures Trading Commission’s approval of Bitnomial’s clearinghouse late last year. By enhancing its surveillance infrastructure with Validus, Bitnomial aims to support its expansion while maintaining high standards of market oversight and client trust. 

Connamara Technologies Powers Zero Hash with EP3® Matching Engine for Digital Asset Platform

Zero Hash, the crypto and stablecoin infrastructure provider, has successfully implemented its digital asset platform using the EP3 matching engine from Connamara Technologies, the exchange infrastructure solutions provider.

By leveraging the capabilities of EP3, a scalable and adaptable platform tailored to the dynamic needs of emerging asset markets, Zero Hash aims to enhance its ability to match orders, manage risk, and explore new market opportunities, bolstering its infrastructure for diverse applications such as cross-border payments, trading, tokenisation, and more.

Jim Downs, Co-Founder and CEO of Connamara Technologies, commented: “Zero Hash has assembled a top-notch business and engineering team, and we are honoured that they selected EP3 and Connamara Technologies as technical partners in creating a world-class crypto infrastructure.”

Adam Leaman, Zero Hash Chief Client Officer and Founding Team member, added: “The team at Connamara provides deep technical expertise and market knowledge that has helped Zero Hash scale critical aspects of our product offering to meet market demand. The digital asset space is constantly evolving and Connamara’s ability to adapt and evolve has played a pivotal role in our success.”