SunGard has acquired the ICE Risk commodity trading solution from IntercontinentalExchange (NYSE: ICE). ICE Risk is a real-time position-keeping and risk management system that captures and values exchange-traded and cleared products across multiple trading venues. ICE Risk also provides exchange connectivity with real-time trade feeds. The acquisition, the terms of which were not disclosed, is not expected to have a material impact on SunGard’s financial results.
ICE Risk will add real-time exchange connectivity, valuation and risk capabilities for futures, options and swaps across multiple asset classes to SunGard’s Kiodex Software-as-a-Service (SaaS) solution. SunGard’s Kiodex is a Web-based commodity trading and risk management solution that integrates trade capture, valuation models, risk measurement, financial reporting and independent market data. Kiodex’s SaaS delivery model provides an automated, Web-based environment that helps customers to simplify implementation, accelerate time-to-market and gain ongoing processing efficiencies, while requiring minimal IT support.
Increasing regulation and a lower tolerance for counterparty risk are leading many commodity trading firms to favor clearing through an exchange clearinghouse. Adding the capabilities of ICE Risk to the Kiodex commodity trading and risk management solution will help provide commodity trading advisors, hedge funds, market makers and high volume trading funds with real-time valuation and risk capabilities for futures and other cleared products. With ICE Risk as part of SunGard’s Kiodex, prime brokers and futures commission merchants (FCMs) will have access to a real-time risk dashboard and customer profit and loss information; banks will have access to a real-time counterparty risk dashboard; and corporations will be able to receive real-time alerts on hedge book valuation changes.
Ben Jackson, chief operating officer of SunGard’s Kiodex business unit, said, “The market dynamics and regulatory environment today point to a continued increase in trading activity in exchange-traded and cleared products. Commodity traders, actively trading in these markets, require the ability to view and value executed trades in real time in order to achieve greater control over risk and exposure. ICE Risk combined with Kiodex will offer traders real-time positions and prices for valuing exchange-traded and cleared products in real-time. This will help commodity traders view any level of the deal’s underlying structure to the lowest level of exposure.”
