EDM vendor GoldenSource has upgraded its flagship solution by building in new features to help its clients deal with tougher risk management requirements and regulatory developments around the pricing of financial instruments. To this end, version 8.2 of its EDM suite includes workflow and validation tools aimed at increasing flexibility and transparency across all pricing functions, including profit and loss analysis, client reporting, product control, risk management and finance.
According to Tom Stock, senior vice president of product management at the vendor, the upgrade is a reaction to the new regulatory emphasis on pricing transparency. “Without automation, firms have to create a different mix of data feeds, hierarchy preferences and validation rules for each pricing policy, making them difficult to duplicate and almost impossible to audit,” he explains. “Automation enables users to serve up multiple golden copy prices from a single data source, scale pricing and independent price verification (IPV) processes and address regulatory demand for auditable pricing.”
The financial crisis has meant firms are now being compelled to prove the accuracy of pricing by indicating how they were derived and providing the ability to track and audit the data processes around valuation, says Stock. Accordingly, the GoldenSource solution will help sell side firms to improve IPV processes and help fund administrators and custodians to support their clients’ multiple pricing and valuation policies, he explains.
The vendor therefore hopes to provide greater clarity into asset valuation by automating the processes around price collection, validation and cross checking. Users can construct pricing methods and validation rules with any mix of sources, hierarchies and validations, and implement a scalable “source data once – use multiple times” approach, says the vendor.
The GoldenSource EDM suite also features end to end workflows for the verification process, aimed at ensuring step by step control and increased auditability. The auditing feature of the solution allows a user to check the validation tests, vendor data and logic around preferred prices for individual prices. In addition, the integration of all pricing related processes eliminates the operational risks often associated with poorly integrated in-house and third party systems, says Stock.
As well as introducing greater transparency, the focus of the new release is also on improving the user experience. The vendor has therefore redesigned the solution’s user interface with customisable screens and functions, thus affording more control to the individual users. The data processes have also been streamlined to allow for faster and more accurate data transport, including improvements around exception management and connectivity, says the vendor.
The GoldenSource EDM suite supports pricing for equities, fixed income securities, options, futures and OTC products, but for the more complex end of the spectrum, it allows a degree of user discretion. Users can therefore plug in their own pricing models for these complex instruments such as OTC derivatives and reconcile them against third party valuation services.
These improvements are in a similar vein to the efforts of many other vendors in the EDM and pricing data focused space. Last month, GoldenSource’s direct rival Asset Control added a new desktop tool to its AC Plus solution also aimed at improving control and transparency around pricing. The vendor community is therefore providing a fairly rapid response to the changing regulatory environment, as regulators further scrutinise areas such as fair value pricing and valuations data feeds.
GoldenSource has been gradually improving its solution offering over the course of the year and, in March, it added another string to its bow with a new solution aimed at assisting its customers in valuing portfolios and managing risks related to derivatives products. Accordingly, GoldenSource for Derivatives organises, archives, stores and categorises all attributes of a range of exchange traded and OTC derivatives, including any underlying securities’ characteristics.
The product also aims to provide flexible integration with document management, trading and risk systems, with a view to enabling firms to build a repository of all derivatives related data. It therefore provides a preconfigured solution for risk management with a 360 degree view of instrument, issuer and counterparty exposure and includes the provision of a local credit default swap (CDS) warehouse capability.