Nasdaq Enhances Risk Platform to Help Banking and Broker-Dealer Community Manage Real-Time Risk
April 12 2023 - 3:00AM
Nasdaq Enhances Risk Platform to Help Banking and Broker-Dealer
Community Manage Real-Time Risk
Nasdaq (Nasdaq: NDAQ) today announced it has made a series of
enhancements to its risk technology platform, which is widely used
by the banking and broker-dealer community to manage liquidity and
market risk. The upgrades will help firms better navigate extreme
market conditions, providing a live view of risk across proprietary
and client trading portfolios with detailed analytics to support
real-time decision-making.
The latest major release of the Nasdaq Risk Platform adds fixed
income securities including Government Bonds, Corporate Bonds and
Convertible Bonds to offer users a consolidated view of risk across
a broad range of asset classes including Fixed Income, Equities and
Equity Options, Exchange Traded Derivatives and Foreign Exchange.
It also significantly enhances multi-factor and intraday stress
testing tools that are capable of isolating and managing specific
risks within large and complex scenario sets.
“The extreme volatility in recent weeks has demonstrated the
consequences of firms not understanding their intra-day liquidity
and market risk. We’ve seen a significant increase in demand from
banks and broker-dealers who recognize the importance of being able
to distill, analyze, interpret, and act on signals in a genuinely
live environment,” said Roland Chai, Executive Vice President and
Head of Marketplace Technology at Nasdaq. “Our position as both a
technology and markets infrastructure provider means that we are
uniquely placed to help firms navigate these unprecedented
headwinds.”
Other significant enhancements include adding an open source
distributed streaming system, Kafka, to feed live risk analytics,
and fully incorporating Nasdaq Derivatives Pricing into the
platform. Delivered via the Nasdaq Risk Platform or standalone,
Nasdaq Derivatives Pricing provides streaming option analytics
including theoretical prices, greeks and recalibrated option
volatilities to clients. The integration enables firms to conduct
P&L, Value at Risk (VaR) and stress testing calculations on
option portfolios which is done using recalibrated intraday
volatility surfaces, a three-dimensional plot mapping option values
against the possible strike prices of an underlying stock.
The platform is a key growth area for of Nasdaq’s Marketplace
Technology business, with the company increasing its customer base
by 50% over the last 12 months.
Timely Capabilities to Navigate a Volatile
Environment
Magnus Haglind, Senior Vice President and Head of Products for
Marketplace Technology at Nasdaq said: “Many firms still rely on
receiving end-of-day pricing and margin calls, leaving them exposed
to significant intraday volatility and the risk of a liquidity
crunch. This threat is only going to increase as we move into a
higher interest rate environment with even greater risk embedded in
bond and derivative portfolios. Nasdaq Risk Platform provides firms
with a consolidated and real-time view of risk across
asset-classes, exchanges and CCPs and brings wider benefits in the
form of more efficient collateral management, which can help unlock
liquidity and boost returns.”
Built in the cloud, and deployed via SaaS, the platform has the
ability to scale rapidly at times of high market volatility. It is
developed and maintained by Nasdaq, applying the same high
standards and levels of monitoring and support the company applies
to its own marketplaces.
About Nasdaq Nasdaq (Nasdaq:
NDAQ) is a global technology company serving the capital markets
and other industries. Our diverse offering of data, analytics,
software, and services enables clients to optimize and execute
their business vision with confidence. To learn more about the
company, technology solutions and career opportunities, visit us on
LinkedIn, on Twitter @Nasdaq, or at www.nasdaq.com.
Nasdaq Media Contact:Andrew
Hughes+44 (0)7443 100896Andrew.Hughes@nasdaq.com
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