LexiFi Introduces "LexiFi Simulation," a Structured Product Sales Support Application

Paris - September 12, 2003 - In 2000, LexiFi, a provider of software for managing structured financial products, introduced a novel approach for representing financial contracts: the award winning "Modeling Language for Finance" (MLFi) is a precise formalism that exhaustively describes sophisticated capital market, credit, and investment products with a limited set of core constructs.

LexiFi is now contributing to develop an emerging derivatives software category: structured product sales support applications. "Structured product sales professionals lack tools to autonomously and interactively develop client solutions," said Jean-Marc Eber, President of LexiFi. "The market for custom derivative sales support software has been underserved until now in part because of the intrinsic difficulty of representing structured financial products, trading strategies, and, perhaps to a lesser extent, market scenarios. MLFi-based applications, such as LexiFi Simulation, overcome this hurdle."

LexiFi Simulation is a complete analytic application for structured product sales professionals who are dissatisfied with the limitations of stand-alone spreadsheets and difficult to use structuring tools.

LexiFi Simulation lets sales staff and customers manipulate contract terms and market scenarios in any way they choose. Unlike simulation tools for risk management, the entire system is geared towards autonomously and interactively developing optimal customer solutions.

LexiFi Simulation enables financial institutions and their customers to conduct instant "clinical trials" to determine whether new financial products are both effective and safe.

LexiFi Simulation provides the following key capabilities:

• Product Definition.   LexiFi Simulation lets users accurately describe sophisticated structured products with complex option clauses, based on any type and combination of underlyings. Contract definitions may be shared with the customer and progressively fine-tuned to converge towards an optimal solution, given the customer's objectives and constraints.
• Pricing.   Users may link MLFi contract definitions with internally developed or commercially available valuation libraries, or rely on a large collection of out-of-the-box, industry-standard models delivered by LexiFi, to value complex products. Robust pricing and risk analysis capabilities are required to set the terms of the proposed transaction and to reduce the bank's legal exposure on derivatives sales.
• Scenario Analysis.   Users may define any number of historical and forward-looking market scenarios. Scenarios may be manipulated and run interactively to develop an intuitive understanding of the proposed transaction and, ultimately, to validate the trading idea.
• Event Planning.   LexiFi Simulation systematically detects potential contract life cycle events and enables users to visualize a contract's entire execution calendar. Detailed event planning helps to educate the customer and to build his confidence in the product.

LexiFi Simulation comprises tools that enable end-users to access contract definition, pricing, scenario analysis, and event planning functionality, and developers to customize and extend LexiFi Simulation, and to integrate LexiFi Simulation with other systems. In particular, LexiFi Simulation's integration module turns Microsoft® Excel into a powerful and easy-to-use content aggregator that sales professionals may tailor according to their requirements.

In addition, LexiFi provides an array of services to accelerate the deployment of LexiFi Simulation and to maximize the value delivered to customers, including financial contract design assistance, education, professional services, maintenance, and support.

LexiFi Simulation creates value for providers and users of structured financial products. With LexiFi Simulation, financial institutions

• increase revenue opportunities
• reduce operational risk
• improve the sales force's skills and productivity
• limit legal exposure on derivatives sales.

As in the pharmaceutical industry, "clinical trials" contribute to the long-term health of both providers and users of innovative products.

LexiFi will actively seek partners to enhance LexiFi Simulation's value proposition and to accelerate the development of the emerging market for custom derivative sales support software.

About LexiFi

LexiFi provides software and services that enable financial institutions to structure, price, and process complex financial products. LexiFi has developed the Modeling Language for Finance (MLFi), a precise formalism that exhaustively describes sophisticated capital market, credit, and investment products with a limited set of core constructs. LexiFi's award-winning offering allows banks, securities firms, and buy-side organizations to keep pace with financial innovation, while controlling costs and risks.