Interactive Data Expands OTC Derivatives Valuation Service

May 15, 2012

Service Now Includes Independent Coverage of Credit Default Swaps  and Select CDS Indices

Interactive Data Corporation, a leading provider of independent pricing and evaluation services, today announced the expansion of its OTC Derivatives Valuation Service to include independent evaluations of Credit Default Swaps (CDS) and select CDS Indices.

The expanded service is designed to provide additional transparency into CDS and CDS Index evaluations, thereby helping clients to more effectively value their diverse portfolios and enhance their risk management and compliance practices. This CDS transparency will be supported by VantageSM, Interactive Data’s Web application that provides clients with extensive data and transparency into the fixed income market and the Company’s evaluations.

“We believe that institutions worldwide will need to accelerate their investments in OTC derivatives valuations and the related technology infrastructure to respond to regulatory change and support their ongoing risk, capital, collateral, liquidity and accounting activities,” stated Cubillas Ding, research director for the securities and investments practice at Celent, a leading research and advisory firm. 

Celent’s November 2011 report, “Dodd-Frank and EMIR Derivatives Reforms,” highlights how derivatives pricing and valuation technologies “will form one of the backbones for the new architecture post-Dodd Frank and EMIR.”  Interactive Data was cited in the report as one of the global market data providers that could leverage its scale to provide broad services that will allow financial firms to achieve benefits by rationalizing their sourcing of valuation providers.

“The strength of Interactive Data’s bond evaluation capabilities uniquely positions us as a leading CDS evaluated pricing service for a wide range of issues,” said Mark Heckert, senior director, Evaluated Services for Interactive Data. “Our CDS evaluation methodology incorporates Interactive Data’s widely-used, award-winning* bond evaluations, which is especially important for less liquid names where there is limited market colour.”  

“The CDS trade and CDS valuation processes at financial institutions are subject to much more scrutiny than ever before,” added Liz Duggan, managing director, Global Evaluations for Interactive Data.  “Our OTC Derivatives Valuation service was developed in response to persistent demand from our bond evaluation clients for independent CDS evaluations and increased transparency into how these evaluations are produced.”

Interactive Data’s CDS evaluation service covers a wide range of single name corporate, sovereign and U.S. municipal entities, and CDX™ and iTraxx™ index trades.  Beginning at approximately 16:30 ET each trading day, the service provides CDS evaluations, curves and analytics in support of clients’ portfolio valuation, financial reporting, risk management, trading, and related functions. 

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