Parameta Solutions, the leading provider of OTC indicative and trade data, and Numerix, the global leading OTC analytics and derivatives pricing company, have announced a new partnership to develop automated, high quality, independent, fair valuations of OTC derivatives to market participants.

With the ability to use Parameta’s market leading OTC data alongside Numerix’s advanced analytical capabilities, this partnership promises to provide a cost efficient, differentiated offering to a high growth sector. With mounting regulatory requirements linked to accounting standards, and an increasing requirement for greater model transparency and transaction substantiation, data reliability and transparency are more important than ever. The introduction of FRTB has reinforced the need for banks to have access to high quality data in order to accurately mark their OTC positions.

The two firms are working together to develop a solution to provide a more effective way of valuing OTC derivatives. The collaboration follows the Bank for International Settlements recent data showing that the notional value of outstanding OTC derivatives rose to a record high of $632 billion last year.

Commenting on the agreement, Ovie Koloko, Chief Product Officer said: “As the regulatory requirements for third party outsourcing, transparency, and risk factor liquidity have increased, the challenge of obtaining accurate and up-to-date valuation services has become more difficult. Simultaneously, technological changes are forcing financial institutions to reconsider their existing architecture and the data sources driving critical applications. By working together with Numerix, we believe that we can offer a truly unique solution to an issue that has only become more pronounced as financial institutions make greater use of OTC derivatives.”

 “Transparency is a key factor in the growth of OTC markets.  It is essential to have transparency in data, models, and their calibration to ensure confidence while trading these products,” emphasized Steven O’Hanlon, the President and Chief Executive Officer of Numerix.  “By combining Parameta’s extensive and diverse data with Numerix’s cutting-edge pricing models and advanced analytics solutions, we can build greater trust in this segment of the capital markets.”

Source: Parameta