Best Structured Product Support System: Murex

Murex’s MXThe .3 platform won this year’s Best Structured Product Support System award for not only exceeding basic representation and pricing requirements, but also for offering a cutting-edge product catalog and flexibility. structure to serve a wide and diversified range of Asian clients.

A structured product is a market-linked instrument whose performance or value is linked to that of an underlying asset, product or index. Murex’s MXThe .3 platform offers complete front-to-back solutions with versatile business representations and analytical integration flexibilities to address the broad and complex nature of the product.

“Structured products companies can become much more successful if they are empowered by systems to seize market opportunities by rapidly adding products, increasing profitability by storing risk, and increasing volume by automating operations,” explains the society. “It’s here that MX.3 brings unique benefits to its customers.

The company’s ready-to-use catalog is the largest in the market, featuring more than 350 packaged products, including all top-selling regional structures and local market-specific products.

Coupled with a structured trade builder, its clients can quickly create linear payout combinations and present them as new products. The structuring tool is particularly useful for the popular Chinese structured deposit business, allowing customers to continuously deploy variants.

Murex’s knowledge of commodity markets also enables many of its clients to quickly implement structured carbon notes based on the contango shape of the emission trading system’s allowance price curve. European Union – another example in which Murex helps its customers to seize market opportunities. (EU EST allowances are climate credits that allow holders to emit a certain amount of greenhouse gases.)

“The range of possibilities [that] customers have at their disposal to expand their catalog – tailored to their circumstances and needs – is unrivaled in the market,” says Murex.

Financial institutions can leverage the product catalog and create their own new products in two robust and flexible ways: A Python-based user payment language, allowing users to quickly describe and evaluate new features with Murex analytics ; and flexible APIsan application programming interface that integrates a user’s own proprietary quant libraries and creates specific functionality.

In today’s market environment, one of the critical needs of a system that supports structured products is to provide the right analytics – the right combination of price accuracy, actionable coverage indicators, and high performance scale to handle growing volumes.

Murex continues to be the benchmark for state-of-the-art capital markets solutions. Its experience in standard market analysis, consistent philosophy and innovation in earnings gives end users a sense of comfort and confidence

Client at a major South Korean bank

Murex’s MX.3 offers curve calibration, volatility management and GPUs-state-of-the-art dissemination models to help clients evaluate and manage their structured products. Models include the Libor market model for interest rates and local stochastic volatility (LSV) model for foreign exchange derivatives, among other analyses.

Additionally, Murex provides model validation documents that detail the numerical implementation and behavior of the model based on up-to-date market data to minimize model risk and validation cost.

The real-time management of structured product portfolios poses a significant challenge for THIS infrastructure because they are computationally intensive. This is where Murex stepped in to help with real-time portfolio management (RTPM). It gives traders instant access to already calculated results in personalized monitoring dashboards with real-time position updates, live risk matrices and near real-time market data updates.

Clients can also tailor advanced risk metrics to their popular structured products with dedicated screens for deeper analysis of future cash flow projections and early termination probability.

With everything combined in one front-to-back-to-risk platform, MX.3 users receive consistent trade representation and analytics, including pricing and hedging, sales distribution, post-trade processing, risk control, regulatory reporting, settlement and accounting.

Full risk and cost control with easy scaling up and down has also enabled banks to comply with sweeping regulations such as the transition of the Interbank Offered Rate (Ibor), the Fundamental Review of the trading book and the rules on uncompensated margins.

In particular, Murex has undergone significant improvement to help customers deal with Ibor shutdown, which remains a thorny issue on non-linear structures. Murex completed the end-to-end transition for structures referencing Ice swap rates and developed the transition for Asia Effects– implicit benchmarks, which are commonly referenced in structured loans.

It also extended its risk-free rate (RFR) non-linear constant maturity swap structures (CMS), CMS– spread swaps, accrued range and interbank offered rate in Tokyo (Tibor) compared to the average overnight inverted floats in Tokyo (Tona). Its payment script has been enhanced to support RFRs.

Meanwhile, Murex has added new features to store risk to better serve customers using MX.3 for their stock autocallable business – one of the most popular structures in the market.

It implemented a new risk matrix scenarios engine to allow more flexible market data changes, a new user-defined risk measures module to create and calculate Greek and hypothetical scenarios, a “smart-over -hedge” to better manage payment discontinuities, as well as LSV templates for autocallable actions to serve as an alternative to pricing.

“Murex continues to be the benchmark for state-of-the-art capital markets solutions,” said a client of a major South Korean bank. “His background in standard market analysis, consistent philosophy and innovation in earnings gives end users a sense of comfort and confidence.”

About Myra R.

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