June 7, 2017
SimCorp, a leading provider of investment management solutions and services to the global financial services industry, and OTCX, a multi-dealer platform for OTC derivatives, today announced a partnership to provide SimCorp clients with direct access to OTCX’s Request For Quote (RFQ) platform. The integration of the platform into SimCorp’s core investment system will give the buy side extensive access to a wide network of OTC liquidity providers in one seamless workflow.
OTCX’s platform covers a range of interest rate derivatives, equity derivatives and structured products, which form a significant proportion of global multi-asset class strategies. The partnership between SimCorp and OTCX leads the way forward for greater automation, providing buy side firms with a smarter, more efficient way to manage OTC trading in a heavily fragmented space. This burden is highlighted in recent research conducted by SimCorp and InvestOps, where 54% of North American buy side firms stated automation was their top strategic objective for 2017¹.
Moreover, in Adox Research’s latest global front office survey, 47% of buy and sell side participants stated their trade execution flows had automation levels below 60%². The addition of OTCX into SimCorp Dimension® increases Straight Through Processing (STP) by relieving the dependence on manual processes, such as reconciling chat, voice, and email data – all methods that continue to dominate OTC derivatives trading.
The integration of OTCX into SimCorp’s Order Manager also has major benefits for the way buy side firms comply with MiFID II. This includes trade reconstruction, compliance with best execution policy, and inclusion of UTC clock timestamps. The combination of one source of data, available across SimCorp’s investment platform, and OTCX’s structured workflow, provides the buy side with a rich MiFID II-ready audit trail for every trade.
The new partnership is part of SimCorp’s continued investment into its front to back investment platform, which manages over $19 trillion in AUM across 180 clients worldwide. One of these clients is Merlon Capital Partners, an Australian-based boutique fund manager, who was also the first of SimCorp’s clients to trial the OTCX platform. With the new partnership, Merlon Capital Partners will now be able to directly source and trade a range of derivatives, from cross currency swaps and emerging market interest rate swaps to inflation swaps.
Andrew Fraser, Head of Trading at Merlon Capital Partners, said: “OTCX simplified our OTC derivatives workflow and enabled us to evidence, on demand, our best execution process. It was important for us to have OTCX integrate with SimCorp Dimension and we are pleased to hear that OTCX and SimCorp will collaborate on further front office integration in the near future.”
Nicolas Koechlin, Chief Executive Officer, OTCX said: “SimCorp and OTCX’s new collaboration will further enhance the trading experience for the buy side with a seamless end-to-end OTC derivatives electronic workflow. We look forward to providing SimCorp’s clients with the most effective price discovery, execution and settlement of trades for liquid and illiquid derivatives. Together we will provide more intelligent tools and better use of data leading to seamless transparent transactions.”
Matthew Reid, Product Manager, Trading, SimCorp said: “This partnership is testament to our mission; to provide clients with a simplified and highly automated workflow across the entire investment lifecycle through one core integrated system. It is our belief that one source of reliable data across all asset classes and instruments, arms the buy side with the best foundation to achieve their investment goals.”
SimCorp provides integrated, best-in-class investment management solutions to the world’s leading asset managers, fund managers, asset servicers, pension and insurance funds, wealth managers and sovereign wealth funds. Whether deployed on premise or as an ASP solution, its core system, SimCorp Dimension, supports the entire investment value chain and range of instruments, all based on a market-leading IBOR. SimCorp invests more than 20% of its annual revenue in R&D, helping clients develop their business and stay ahead of ever-changing industry demands. Listed on NASDAQ Copenhagen, SimCorp is a global company, regionally covering all of Europe, North America, and Asia Pacific. For more information, please visit www.simcorp.com.
OTCX was one of the first web-based trading platforms for exotic and vanilla OTC derivatives, allowing users to negotiate trades more efficiently and evidence best execution. Our objective is to improve workflow processes between dealers and clients and reduce operational risk, whilst giving users control over their trades. With compliance teams being required by increasing regulation to be ever more stringent and an enormous number of verbal trades still being missed, our Request for Quote (RFQ) platform enables the buy-side to be fully compliant with all impending regulation such as MIFID ll. The OTCX platform is a smart tool for bi-lateral negotiation, increases flexibility in trading and employs state of the art, easy to use technology. Headquartered in London, OTCX also has offices in Sydney, Australia. For more information contact OTCX by email on email@example.com or telephone +44 (0)207060 4750.