Simplex Technology adds credit derivatives module

Japanese financial software firm Simplex Technology plans to introduce credit derivatives capabilities to spDeriv, its interest rate and foreign exchange derivatives trading platform, according to Mitsuru Igarashi, senior managing director at the company in Tokyo.

"The Japanese credit derivatives market may still be in its infant stages, however, we believe how fast the market can grow and mature relies on how fast institutions can get systems for trade and risk management up in order to monitor the effectiveness and performance of the new instruments," said Igarashi.

spDeriv includes modules for valuation, trade entry, risk management, and report generation. At first, the system will include facilities for standard credit default swaps, with plans to later expand to structures such as credit-linked notes, total return swaps and first-to-default baskets. Simplex expects the system to be in use by the second quarter of 2003

Simplex was established in 1997, with most of the founders coming from trading, financial engineering, and trading technology backgrounds at Salomon Brothers (now Nikko Salomon Smith Barney).

Earlier this year, Simplex went public on Jasdaq in Japan and had annual revenue and pre-tax income for the year ending March 2002 of ¥1.6 billion ($13.3 million) and ¥300 million ($2.5 million) respectively.