Reuters’ new JRisk On Demand, a tailored risk management solution for hedge funds developed by the Applied Networks unit that it acquired last year, not only delivers real-time risk management tools directly to individual managers’ desktops, but aims to provide “enormous” cost benefits to clients through access to Reuters reference and terms and conditions data.
The release of JRisk On Demand coincides with the increase in frequency of updates of the bond instrument evaluations available via the Reuters DataScope Select platform. The addition of several intraday valuations is aimed at meeting the needs of more regular portfolio valuations than the traditional end of day calculation.
Similarly, a growing appetite for risk and increased volume of trades means that increasingly hedge funds need access to real-time risk positions rather than rely on end-of-day calculations. As such, JRisk On Demand provides what Reuters says is “true multi-asset-class coverage” that brings together real-time risk management functions on a single platform.
According to Nigel Cheetham, product manager for JRisk on Demand at Reuters, “if a manager has bonds in their portfolio, all the terms and conditions for, say, credit default swaps (CDSs) and other instruments, will all make use of Reuters’ reference data.”
He adds: “Obviously, things like coupon rates, maturity dates, exercise dates, strike prices, etc … all come directly through Reuters data. The idea here is that all the clients would really need to do in order to identify what they are trading, is to track it with the security identifiers – CUSIPs, ISINs or RIC codes.”
By inputting any of these identifiers into the JRisk On Demand platform, users are able to pull down all the relevant terms and conditions data from the Reuters database. This, Cheetham says, could translate into significant cost savings for users currently subscribing to third party data services to meet their terms and conditions requirements.
Risk management is now vital to hedge funds as they trade an ever broader set of instruments across all asset classes. JRisk On Demand can be accessed globally via a standard web-browser interface, allowing users to view detailed intra-day risk measures as well as profit and loss and position information.
The product is hosted in partnership with GlobeOp Risk Services using Reuters JRisk technology, which can be swiftly deployed with what Reuters describes as “minimal upfront investment” and the ability to work across any IT infrastructure.
To meet the growing demand of intraday valuations, Reuters has added 4 p.m., New York and London time, the valuations for interest-rate swaps, CDSs and loans CDSs available via Reuters DataScope Select, in addition to its regular 6 p.m. local time valuation.
According to Reuters, “delivering prices at 4 p.m. and 6 p.m. New York time (and 4 p.m. and 6 p.m. London time), Reuters provides large sell side and buy side customers with the range and depth of consistent data needed to promote STP throughout the front and back offices and ensure accountability and compliance to investors and regulators alike.” By offering the additional time slot, Reuters believes it will give clients longer lead times to act on the data received.
CDS evaluations are based on credit curves that are updated by 4 p.m. London time and at 3 p.m./4 p.m. New York time. This will enable clients to value their deals faster and before end of day. The Reuters evaluation team works with a range of broker/dealers to obtain instrument quotes and up-to-date credit movements. IRS evaluations are based derived from swap rates obtained from Reuters’ dealer contribution network.
The CDS and IRS valuations are delivered via Reuters’ hosted DataScope Select platform. The system allows customers to create custom terms and conditions on the platform, allowing them access to data when they need it.