Asset management system supplier SimCorp has incorporated a new module, XpressInstruments, which focuses on the processing of structured products and exotic instruments, into its investment management system, SimCorp Dimension. According to the vendor, this new addition allows these complex instruments to be valued using multiple market tested pricing and valuation models already contained within SimCorp Dimension.
The addition of XpressInstruments is part of SimCorp’s plan to cover a greater number of asset classes in line with its clients’ requests, explains Cath Rawcliffe, vice president of UK sales and marketing at SimCorp. “The new module dramatically cuts the time taken to introduce structured products and exotic instruments to the system and supports them throughout the entire STP chain,” she says.
Rather than managing these instruments on external spreadsheets, the vendor’s clients can handle these products and manage them in SimCorp Dimension in the same way as standard exchange traded and OTC products, she adds.
According to the vendor, XpressInstruments allows specialised products to be added to SimCorp Dimension in a shorter timeframe than previously available – in few days or weeks rather than months. Once they have been added, instruments’ events are handled automatically, including fixings, payments and exercise and choice decisions.
The specialised products and exotic instruments can be valued using multiple market tested pricing and valuation models already contained within SimCorp Dimension, says Jørgen Vuust Jensen, chief business consultant with responsibility for financial instruments in SimCorp Dimension. When new pricing models are added to the system, they can immediately be used to price existing instruments.
“The development and integration process for XpressInstruments took around 12-18 months and we had a client focus group to provide feedback on the process,” he adds.
The new module is based on technology developed by French software provider LexiFi, with whom the vendor has entered into an agreement to integrate LexiFi’s financial instrument modelling technology into Dimension, explains Vuust Jensen. “The LexiFi software fits perfectly with SimCorp Dimension and allows us to keep up with the innovation of new financial instruments. The resulting functionality is released with SimCorp Dimension version 4.3,” he says.
SimCorp is confident that the new module will allow its clients to cope with the speed of change in the market and instruments will be added as and when they are requested.
“The main issue we faced when developing the new module was how to make it look and feel like SimCorp Dimension without sacrificing flexibility,” says Vuust Jensen. “We consulted the user group on their priorities with regards to adding these instruments and went from there.”
According to the vendor, around 25 to 30 clients are already displaying serious interest in the new module thus far and it will be ramping up its sales and marketing efforts over the coming months.