RiskLine

The use of incorrect price information is a major potential risk for financial services providers. For example, when calculating bid prices for investment funds, the use of incorrect price information may pose enormous risks and result in losses. According to our philosophy, the provision of price information takes place centrally in an upstream process.
RiskLine queries price information of different qualities (realtime / delayed / end-of-day) at different data suppliers, checks them for market conformity using various (e.g., statistical) methods and supplies quality-assured price information to the target systems that require it.

The query at the data suppliers occurs at the desired level of data quality and at the time when the target systems need the data for further processing (“just-in-time”). RiskLine allows both the one-time and the frequency-based query of price information. To ensure a high level of automation, RiskLine generates all required price requests independently.
The integration of different data suppliers allows the application of additional methods for quality assurance of the information. Due to the open system architecture, any number of data sources and target systems can be connected to RiskLine.

CENTRALIZED SUPPLY AND VALIDATION OF MARKET DATA

The integration of different data suppliers allows the application of additional methods for quality assurance of the information. Due to the open system architecture, any number of data sources and target systems can be connected to RiskLine.

TYPES OF INSTRUMENTS

  • Stocks
  • Bonds
  • Investments & Equity funds
  • Certificates
  • Futures
  • Options
  • Forward exchange rates
  • Exchange rates
  • Structured products (e.g. ABS, MBS, TBAs)
  • Commodities

VALIDATION METHODS

  • Validation against other data providers and sources
  • Validation against previous day‘s price
  • Validation of price changes within the last x-days
  • Change with consideration of historical volatilities (dynamic tolerance limits)
  • Validation of the price timestamp date/time
  • Check for 0-values
  • Check for change of provider
  • Manual validation
  • Overall check of structures (e.g. yield curves)
  • Combination of validation methods

Verification of market conformity and fair value check

The verification of transactions for market conformity usually requires actual and quality-assured market data and expertise on the relevant verification methods. With RiskLine transactions can be transferred from the order / trading systems without media and time delays into the system, where the verification of market conformity is largely automated by various methods. RiskLine supports verification of the transaction price against a market price as well as against a fair value calculated by RiskLine or a third-party system.

The following verification methods are supported by the system:

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Verification of the transaction price against the market price

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Verification of the transaction price against the fair value calculated by the system

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Verification of the transaction price against the fair value calculated by a third-party system

VERIFICATION METHODS

MARKET CHECK

  • Stocks
  • Bonds (with OTC module)
  • Investment funds (ETF)
  • Equity warrants
  • Certificates
  • Futures
  • Options
  • Currency futures (FX Outright)
  • Currency swaps (FX Swap)
  • Foreign exchange spots (FX Spot)

FAIR VALUE

  • Bonds
  • Currency futures (FX Outright)
  • Currency swaps (FX Swap)
  • Call money
  • L&D IAM
  • L&D Periodic
  • L&D Variable
  • Forward Rate Agreement (FRA)
  • Interest Rate Swap (IRS)
  • Cross Currency Interest Rate Swap (CIRS)

Your benefit

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Ensuring data consistency

By centralizing data supply, all target systems in your company receive data from a single source. Data inconsistencies due to the use of different price sources or query times are avoided.

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Quality assurance of information

Similar to an incoming goods inspection in industry, RiskLine carries out a quality assurance of all courses and prices.
Incorrect information can be recognized and its processing in downstream processes can be avoided. This central, upstream test is carried out using various validation methods.

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Automation of price supply

RiskLine is designed to automate the supply of market data. Regular communication between target systems and data sources is fully automated. Manual activities are essentially limited to the individual maintenance and enhancement of price inquiriesas well as the manual handling of implausible market data identified by the system as potentially incorrect.

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Compliance with regulatory requirements

RiskLine supports you in complying with regulatory requirements such as systematic and transparent monitoring of trades as part of the market conformity check in accordance with MiFID II / MaRisk or price validation in accordance with KARBV.

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Auditing acceptability

To ensure the audit-proof provision of market data, RiskLine historizes and records all relevant, manual data changes and distributions. In addition, RiskLine applies the four-eyes principle for critical activities.

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Fail-safe data supply

RiskLine can largely compensate the technical failure of a data source. In this case, target systems are not supplied from the preferred data source, but from one or more alternative data sources. In this way, the dependency of the target systems in your company on a data provider can be significantly minimized.

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Cost transparency

Many systems used by financial service providers are equipped with their own price supply. The consequence of this is the parallel supply of information including multiple cost burdens. With RiskLine, this intransparency can be resolved in the price supply. To do this, the system stores all data relevant to cost accounting, which enables the costs for the prices to be allocated by target system or cost center.

RiskLine is the overall solution for

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Validation, quality assurance and centralized distribution of financial market data (prices, securities master data, corporate actions) in your company

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Verification of transactions for market conformity, as well as for the fair value calculation of non-liquid securities.