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NASDAQ Risk Platform Sees Massive Interest in its IM Capabilities

I spoke recently with Adrian Carr of NASDAQ Risk Platform who was keen to tell me about its initial margin (IM) capabilities. A fully-fledged cross-asset trade and risk system, NASDAQ Risk Platform includes IM calculations and forecasts what the margin call will be along with real-time P&L, stress testing and other key information. It further allows users to stress test a portfolio for IM and do what if trades to see their impact on IM as well. “We have been inundated with energy companies and producers that are interested in this functionality. Our Cloud deployed SaaS risk service allows us to onboard new customers very quickly and cost effectively” he told me.

In our experience as analysts, few available commercial solutions come with an IM calculation capability and, given current market conditions, it is perhaps not surprising that one that does is of interest. “We seem to have a bit of a lead in this area,” Adrian said. “We are also going to build an offering called IM as a Service as SAAS because many inquiries don’t necessarily want an entire risk solution but are very keen for this functionality.” Customers would send in their portfolio and get back the results.

The IM functionality includes all types of IM methodologies across 37 exchanges including SPAN margining allowing the software to calculate IM, PRR and VaR in the IM module. Individual traders can see their own portfolios, stress test them and perform what if analysis. It also plans on adding margin optimization next year, he told me.

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NASDAQ Risk Platform is also very busy doing lots of demos and has this year signed several new customers including a ‘massive non-bank prime broker in the US’, he told me. It will go live at the end of Q1 2023 and that has meant expanding into other asset classes like fixed income. It has also signed a tier 2 bank in the US recently where its ability to support a number of risk and exposure calculations and limits plus the ability to decompose ETF positions addresses their obligations to SEC 15c3-1a(6). That bank goes live next month. Meanwhile, it has also signed an energy broker for IM replication and is hoping to sign another prior to year end. “We might do five deals this year,” he said.

NASDAQ Risk Platform sponsored our risk management technologies research this year. That report is now available for a free download at CTRMCenter and Adrian joined me to discuss the results of that important study on the latest CTRMRadio podcast episode due out this week.