08 Oct 2010, Risk magazine, Risk magazine
Industry experts discuss the best practices firms are implementing concerning evaluated pricing, operational frameworks, governance and technology tools. The experts also explore how vendors are stepping up to the plate, providing additional products and improved transparency.
Questions to be addressed:
1. What is considered best practice today, in terms of the number of independent third-party pricing sources buy-side firms should be using on a transaction?
2. How are regulatory changes impacting buy-side appetite for complex financial products and evaluated pricing in the EU/US?
3. Why is transparency so important to evaluated pricing clients, and how is the industry working to deliver this?
4. What effects have changes in technology had on evaluated pricing accuracy? How are these improvements helping clients actively manage risk?
5. Are buy-side firms taking active steps to improve their risk management around valuation risk? Are firms overhauling their approach to data or simply tinkering around the edges?
6. The economic and financial crisis that has engulfed the world over the past three years has created greater sensitivity and volatility in valuation results. How are vendors working with clients to help them manage the impact of this volatility on their processes, portfolios and reporting requirements?
7. What advances are being made in building robust pricing tools for illiquid assets and markets? What level of comfort around pricing will be required for buy-side firms to feel comfortable with less liquid assets in the future?
8. Is counterparty risk being factored into valuations effectively? What improvements have recently been made in this area and what challenges have firms yet to tackle?
9. How should firms go about organising or consolidating the data and models they use for pricing, to reduce operational risk?
10. Are boards of directors and senior mangers putting in place the necessary governance structure to sustain a culture where valuation risk is managed at all levels in an organisation?
Ian Blance, head of evaluated pricing business development, SIX Telekurs
Liz Duggan, managing director, evaluations, Interactive Data
Brian Sentance, chief executive officer, Xenomorph