Interactive Data to Provide Valuations of Complex Structured Products Through Exclusive Agreement with Prism Valuation
September 16 2008 - 4:30AM
Business Wire
Interactive Data Corporation (NYSE: IDC), a leading provider of
financial market data, analytics and related services, today
announced an exclusive agreement between its Pricing and Reference
Data business and Prism Valuation. Under the agreement, Interactive
Data Pricing and Reference Data will now have the capability to
provide valuations of highly complex OTC derivatives and structured
products as part of its wide-ranging pricing and evaluation
services. Prism Valuation, which was founded in 2006 and maintains
offices in London, Melbourne and Toronto, provides valuations of
complex OTC derivatives and structured products based on a wide
range of underlyings including: interest rates, FX, inflation,
equities, credit, commodities and hybrids. Interactive Data�s
clients will be able to request valuations on a per instrument
basis, which will be calculated by Prism Valuation�s quantitative
analysis team and then delivered via FTSSM, Interactive Data�s
securities administration tool. Interactive Data already has
clients who are subscribing to these valuations. The Prism
Valuation team emulates the valuation processes of a typical
structured products dealer by synthesizing the most important
components required for valuation and analysis: up-to-date market
data, appropriate valuation models and targeted calibration
strategies. The service that Interactive Data will offer includes
valuation transparency reports that provide a breakdown of the
method to achieve a given valuation for each deal, including a
detailed discussion of the models and calibration strategies
selected. This level of transparency can help clients comply with
current regulatory and auditing demands. Prism Valuation has a core
team with many years of direct front office and quantitative
experience at structured products dealers. In addition, Prism
Valuation�s strategic partnerships include ICAP, the world�s
premier interdealer broker, which provides underlying market data,
and NumeriX, one of the foremost global providers of cross asset
pricing and risk analytics for exotic derivatives and structured
products. Prism Valuation�s market experience and important
strategic relationships enable valuations of derivatives and
structured products across multiple asset classes. As part of this
strategic alliance, Interactive Data has purchased a minority
ownership stake in Prism. Financial terms of the investment were
not disclosed. Greg Cripps, president and CEO, Prism Valuation,
said, �We are delighted to enter this relationship with Interactive
Data, which has many years of experience in evaluated pricing, and
extensive global distribution channels. We look forward to offering
our independent valuation services of complex products via
Interactive Data, and delivering valuations and risk analysis
transparency to help customers further adapt to an increasingly
regulated global business environment.� Roger Sargeant, managing
director, Interactive Data (Europe) Ltd, added, �Financial
institutions continue investing in new, ever more complex financial
instruments in order to help achieve portfolio diversification,
hedge risk, optimize performance and drive growth. As part of our
ongoing strategy to address our customers� evolving needs, we
continue to expand the breadth and depth of our coverage by adding
pricing and valuations of more complex, esoteric structured
products. Given the current credit and trading conditions, our
relationship with Prism Valuation will help customers meet their
mark-to-market pricing obligations as well as the demands of credit
and risk management, and portfolio management.� Interactive Data,
through its Pricing and Reference Data business, is a leading
independent provider of daily evaluations for fixed income
securities. With over 30 years of experience, Interactive Data�s
teams of evaluators operating in three major time zones evaluate
approximately 2.5 million fixed income issues every day. Over 5,000
financial institutions worldwide, ranging from central banks to
large investment banks, subscribe to Interactive Data�s bond
evaluations. About Interactive Data Corporation Interactive Data
Corporation (NYSE: IDC) is a leading global provider of financial
market data, analytics and related services to financial
institutions, active traders and individual investors. The
Company's businesses supply real-time market data, time-sensitive
pricing, evaluations and reference data for millions of securities
traded around the world, including hard-to-value instruments. Many
of the world's best-known financial service and software companies
subscribe to the Company's services in support of their trading,
analysis, portfolio management and valuation activities. Through
its businesses, Interactive Data Pricing and Reference Data,
Interactive Data Real-Time Services, Interactive Data Fixed Income
Analytics, and eSignal, the Company has approximately 2,300
employees in offices located throughout North America, Europe, Asia
and Australia. The Company is headquartered in Bedford, Mass.
Pearson plc (NYSE: PSO; LSE: PSON), an international media company,
whose businesses include the Financial Times Group, Pearson
Education, and the Penguin Group, is Interactive Data Corporation's
majority stockholder. Interactive Data Corporation is celebrating
its 40th anniversary in 2008. Interactive Data Pricing and
Reference Data provides global securities pricing, evaluations and
reference data designed to support financial institutions� and
investment funds' pricing activities, securities operations,
research and portfolio management. Interactive Data Pricing and
Reference Data collects, edits, maintains and delivers data on more
than 6 million securities, including daily evaluations for
approximately 2.5 million fixed income and international equity
issues. Interactive Data Pricing and Reference Data specializes in
�hard-to-get� information and evaluates many �hard-to value�
instruments. Pricing, evaluations and reference data are provided
in the U.S. through Interactive Data Pricing and Reference Data,
Inc. and internationally through Interactive Data (Europe) Ltd. and
Interactive Data (Australia) Pty Ltd. For more information about
Interactive Data Corporation and its businesses, please visit
www.interactivedata.com. About Prism Valuation Prism Valuation was
founded in June 2006 to offer independent valuation services of
complex structured products in all asset classes. Prism Valuation
has a core group of people with direct front office experience from
structured product dealers, most of whom also hold PhDs in Science
or Engineering. Prism Valuation�s primary strategy in providing
reliable, independent valuations, transparency and risk analysis of
structured products is to emulate the capabilities of a structured
products dealer by synthesizing high-quality underlying market
data, the appropriate valuation models and then implementing the
relevant calibration and valuation strategies. Prism Valuation is
not affiliated with any structured dealer and is therefore able to
offer an independent valuation analysis. Prism Valuation is also
able to evaluate and perform analysis on deals not yet in the
broader market domain for clients involved in newer structured
products. Prism Valuation has strategic relationships with ICAP,
the world�s premier interdealer broker, for reliable, up-to-date
underlying data, and NumeriX, one of the foremost global providers
of cross asset pricing and risk analytics for exotic derivatives
and structured products. ICAP also has a minority stake in Prism
Valuation. Prism Valuation has offices in London, Melbourne and
Toronto. For more information about Prism Valuation, please visit
www.prismvaluation.com.
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