The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

PolarLake Unveils OTC Derivatives Solution Based on Reference Data Distribution System

Dublin-based PolarLake has tailored its reference data distribution capabilities to create a trade lifecycle solution for the OTC derivatives marketplace. The new platform provides integration of FpML (Financial Products Markup Language)-based trade messages, reconciliation and trade matching, and business process management for OTC derivatives.

According to CEO John Randles, the new platform emerged from the company’s client activities in derivatives in general and FpML in particular, which have been ongoing for quite some time. “Unfortunately,” he says, “we kept this a secret, and this release is intended to make people realize what technology we have in this space.”

In productizing its OTC derivatives capabilities, PolarLake has been able “to leverage our product in reference data distribution to build a solution focused on data analysts rather than a pure technology product,” Randles says. “This is a key differentiator for us.” The company has also leveraged other key components of its offerings, including its reconciliation service, he adds.

Randles says the move was also inspired by client requests that it expand beyond its core reference data distribution and FpML integration activities. “People know us for being the best integration platform in the market for dealing with FpML and we have seen a huge spike in the interest in this technology,” he says.

“However, we have also seen large sell sides and fund administrators that are looking for broader solutions – including reconciliation, matching, connecting to the confirmation services, BPM etc. Our release now covers those areas so the onus is not on the firms to figure it all out for themselves. OTC derivatives integration technology is moving beyond the early adopter stage, so this is great timing for us.”

Randles says the marketplace is increasingly seeking solutions to complex problems, and has grown increasingly frustrated by traditional software suppliers. “Traditional reconciliation vendors,” he says, “are very comfortable in a high volume cash and equity environment, but have no concept in their fixed models of how to manage a thousand leg derivative. Their product architectures are fundamentally unsuited to the problem and cannot deal with the complexity of the OTC derivatives market. There is not a simple ISIN in the OTC market. “

Randles says PolarLake’s underlying technology, based on a patented XML pipelining engine, “is inherently suited to the unstructured nature of OTC derivatives and it is around this platform we have built the applications and algorithms in our solution.”

These developments have coincided with the growth in urgency around operational issues relating to OTC derivatives. Says Randles: “As can been seen in the recent A-team Group study on instrument data, OTC derivatives support is the number one issue making people look again at the data strategies. According to one firm surveyed, ‘50% of the firm’s manual data effort goes into sourcing and resolving issues in OTC products.’ This is typical of the firms we are dealing with where they want a specialized solution to complement existing data infrastructure.”

With the new OTC derivatives platform, PolarLake is targeting sell side institutions, custodians /fund administrators and large buy side organizations. Among PolarLake’s data integration clients are JP Morgan, Societe Generale and Pioneer Investments.

Related content

WEBINAR

Recorded Webinar: Data management for analytics and market surveillance

The financial services industry is starting to harness the potential of Big Data analytics to gain insights that can yield competitive advantage. At the same time, market surveillance has emerged as a major requirement for trading firms across the board as regulations like MiFID II and Market Abuse Regulation (MAR) push both buy- and sell-side...

BLOG

Harbr Data Exchange Democratises Internal Data, Provides Collaboration for Data Product Creation

Harbr is taking a new approach to data value with an enterprise data exchange that can be used to democratise internal data, enrich a data ecosystem by adding external data, or monetise data by building a marketplace that provides insight into numerous data products. The London-based company was founded in 2017 to address the problem...

EVENT

Briefing: ESG Data Management – A Strategic Imperative

This breakfast briefing will explore challenges around assembling and evaluating ESG data for reporting and the impact of regulatory measures and industry collaboration on transparency and standardisation efforts. Expert speakers will address how the evolving market infrastructure is developing and the role of new technologies and alternative data in improving insight and filling data gaps.

GUIDE

Enterprise Data Management

The current financial crisis has highlighted that financial institutions do not have a sufficient handle on their data and has prompted many of these institutions to re-evaluate their approaches to data management. Moreover, the increased regulatory scrutiny of the financial services community during the past year has meant that data management has become a key...