Validus Risk Management (‘Validus’), a leading independent financial risk advisory and technology firm, has introduced ISDA Ops, a groundbreaking solution aimed at automating the calculation and monitoring of complex ISDA Additional Termination Events (ATEs) and Credit Support Annexes (CSA) Thresholds.
The solution provides an intelligent and scalable approach to constructing ATE and CSA Threshold conditions. The new platform significantly enhances efficiency by simplifying the management of ISDA and CSA terms, offering a streamlined approach for handling counterparty and liquidity risks.
The complexity of monitoring ATEs and CSA Thresholds has historically presented significant challenges for financial institutions. Using Validus’ proprietary technology, ISDA Ops was developed taking into consideration over 2,000 trading lines across more than 40 major counterparties, providing a monitoring platform, which allows users to analyse and test conditions using live and forecasted data. The tailor-made design of the Expression Builder provides complete flexibility, allowing full customisation and accommodating all possible terms. ISDA Ops empowers real-time proactive decision-making, enabling firms to manage collateral requirements and counterparty risk more effectively.
Key benefits of ISDA Ops include:
- Automated Tracking and Calculation: ISDA Ops provides automatic calculation and tracking of ISDA ATEs and CSA Thresholds across all counterparties, ensuring seamless risk management.
- Real-Time Risk Management: Users can proactively make decisions in real time, significantly improving the management of counterparty and liquidity risks by identifying potential collateral calls early.
- Enhanced Reporting: The platform provides intelligent reporting tools that simplify the process of tracking and updating ISDA terms, boosting transparency.
- Scenario Analytics: With the ability to test conditions using both live and forecasted data, ISDA Ops enable users to simulate potential future scenarios and proactively address potential risks.
Additionally, ISDA Ops integrates with Validus’ Horizon platform, including RiskView, a configurable hedging monitoring and reporting framework, TradeView, a front-office hedging platform, and PortfolioView, a portfolio-level risk management platform. The new features enable CSA Thresholds to be updated and monitored within RiskView, proactively identifying potential collateral calls, while PortfolioView data is integrated for condition testing.
Alain Smith, Head of Client Engagement at Validus Risk Management, said: “Monitoring and managing ISDA ATEs and CSA Thresholds are crucial risk management functions but has historically proven a major challenge due to the scale and complexity of the task. ISDA Ops therefore represents a significant breakthrough for risk management teams – presenting a clear, consolidated view of the data and allowing users to identify breaches and model for future risks. Cutting-edge technology has made processing huge volumes of data possible, looking to the future our aim is to keep ISDA Ops at the forefront – deploying generative AI to deepen the capabilities of our game-changing solution.”
Validus is scheduled to deliver further enhancements to ISDA Ops before the end of the year, using generative AI to efficiently parse complex language, scale the offering and drive faster data retrieval. The launch follows the announcement in June that Validus delivered several upgrades to TradeView, enabling automation pre-trade checks.
