Mizuho selects FNX for interest rate derivatives processing

Japan’s Mizuho Bank has licensed FNX’s Sierra System for use in processing interest rate futures and options.

The bank has integrated its interest rate futures and options desk onto the Philadelphia-based software company’s Sierra open architecture platform. FNX claims this will allow Mizuho to take advantage of the flexibility and scalability of its straight-through processing (STP) solution, and also position it for further expansion of current and future trading business.

The Sierra system contains management and control features for processing exchange-traded products. Market risk and operational risk features are built into the system as well as fully automated STP, said FNX.

Jim Dennelly, executive director of product management at FNX, said the company has enhanced the interest rate product processing part of the system, with extensions in both functionality and product coverage. Features include real-time position and risk management blotters, sensitivity analysis, stress testing and other simulation tools.

Mizuho Bank and its predecessor banks have used Sierra for foreign exchange options trading and risk management since 1997. The interest rate modules are built on the same architecture.