The UK Financial Services Authority (FSA) has this week been forced to back down somewhat in its aggressive approach to introducing further changes to its liquidity risk regime in light of the current economic climate. As promised last year, the regulator has assessed the state of the market and decided not to push ahead with the quantitative aspects of its regime, namely the controls around liquid asset buffers.
Last week, interdealer brokerage firm Tullett Prebon announced it had entered into an acquisition agreement for an undisclosed amount with derivatives valuation services provider OTC Valuations (commonly known as OTC Val). Paul Humphrey, CEO of Tullett Prebon’s Electronic Broking and Information division, explains to A-Team Insight that the acquisition is all part of the firm’s drive to service the complex end of the valuations market.
Rather than pressures related to regulation, the business concerns of the front office are driving a spate of investment into revamping firms’ counterparty risk systems, according to a recent survey conducted by risk solution vendor Algorithmics. The investments are focused largely on credit value adjustment (CVA), which allows for more dynamic pricing of counterparty credit risk into new trades, says Bob Boettcher, senior director of product strategy at Algorithmics.
Kinetic Partners has added a new face to its team, ex-RBS Portfolio Risk Services MD Christian Szylar, to lead the vendor’s efforts in the risk modelling and valuations space. The vendor has been stepping up its approach to the market by touting its modular approach to risk management as a more practical way to meet new regulatory requirements, such as those under UCITS IV, and is hopeful that Szylar will boost its chances of success.
Following the relocation of its head office from Luxembourg to London last year (see 
As noted by A-Team Insight last month (see 
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
Calypso Technology will be focusing on reaching the more traditional end of the buy side spectrum this year, as these firms continue to invest in alternative instruments and seek out a suitable risk management solution provider, explains Dave Wong, senior market specialist at the vendor. Pension funds and the institutional investment community are dabbling more and more in alternatives and they are hard pressed to deal with the risk management challenges and thus need a provider that can cope with the complexity of these instruments, he claims.
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