According to market research firm Z/Yen, in 2007 overall trade volumes were up 46 percent for credit derivatives and 62 percent for equity derivatives. And although trade volumes in the "plain-vanilla" interest rate OTC derivatives market only grew by 16 percent, so-called "exotic" OTC derivative instruments showed an average increase of 83 percent.
OTC derivatives are inherently more complex than traditional exchange-traded derivatives and as such place constraints on both the personnel and automation components of back office operational processing. As the recent turmoil in the OTC credit derivative market has shown, adding additional staff is insufficient. The majority of current trading volumes in credit default, interest rate and equity swaps continue to be handled through paper-based confirmations. A process this critical and complicated requires automation in conjunction with proper personnel to maximize efficiency.
SS&C's Debt & Derivatives™ application is a comprehensive financial software package designed to process and analyze all mid to back office activities related to your issued debt and derivatives portfolios. Features and benefits include:
- Accrual and payment processing - Calculate and post all interest and fee accruals and payments, handle floating rates and date resets automatically without manual intervention. The ability to have a formula calculate your floating rate is also available for more complex calculations.
- Deal pricing and mark-to-market - Provide precise detail and valuation of debt and derivative portfolios.
- Accurate forecasting - Project income/expense and cash flows based on forward rates implied by current market yield curves or user-defined rate scenarios for accurate budgeting and forecasting.
- Extensive reporting - Choose from more than 80 standard reports for tracking, accounting and analyzing your portfolio.
- Risk analysis - Customize risk calculations for your particular needs.
- Payment and deal confirmation processing – Track counterparty deal numbers and confirmation information in the system.
To find out more about how you can maximize your back office efficiencies, please contact us.