SimCorp

SimCorp offers full coverage for derivatives and structured products with XpressInstruments, a SimCorp Dimension module based on LexiFi's technology

Summary

SimCorp and LexiFi teamed up to achieve SimCorp's goal of providing complete coverage for non-standard financial products within SimCorp Dimension, SimCorp's integrated investment processing solution. SimCorp used LexiFi's software and drew on LexiFi's expertise to develop XpressInstruments, a SimCorp Dimension module designed to add full support rapidly into the system for derivatives and structured products. XpressInstruments allows SimCorp Dimension clients to utilise such instruments within investment portfolios with the same high level of control as they experience for simpler securities. The partnership between SimCorp and LexiFi demonstrates SimCorp's aptitude for exploiting new technology and the robustness of LexiFi's original approach.

Client presentation

SimCorp, a global company listed on the NASDAQ OMX Copenhagen, provides investment and portfolio management software and related services to investment managers, asset managers, fund managers, fund administrators, pension funds, insurance funds and wealth managers. SimCorp's product, SimCorp Dimension, supports a comprehensive set of investment management processes from the front-office to the back-office. SimCorp Dimension helps SimCorp's clients to reduce their operational costs, mitigate risk in their businesses and it enables them to position themselves for growth.

XpressInstruments

XpressInstruments is SimCorp's solution for rapidly adding support for complex, non-standard instruments in SimCorp Dimension's integrated environment. XpressInstruments handles derivatives and structured products consistently throughout the instrument lifecycle. It provides: simple input of contract data from term sheets in an instrument-specific user interface; full accounting functionality that enables P/L calculations; automated contract event management; market-tested valuation models; and a development environment that enables users to independently design new instruments.

SimCorp Dimension's clients benefit from a central access to all holdings, P/L calculations and processing functions. This reduces operational risk, increases transparency and shortens time to market for new instruments.

LexiFi provides crucial software components and expertise

SimCorp used LexiFi's software and drew on LexiFi's expertise to develop XpressInstruments.

LexiFi provided key software infrastructure components to SimCorp, including:

  • MLFi, a formal language for describing financial contracts, from inception to maturity;
  • an open pricing architecture that clearly separates the various pricing-related data elements and services in order to support a variety of integration scenarios with existing valuation algorithms and calculation platforms;
  • proven implementations of both industry-standard and advanced pricing models;
  • an innovative user interface generation component, which automatically derives a fully functional user interface from the economic parameters that define a MLFi contract;
  • an integrated development environment that, when delivered as part of SimCorp Dimension, enables users to independently design new financial instruments.

In addition, SimCorp opted for the technology and knowledge transfer program that LexiFi proposes to partners who wish to acquire the tools and skills to become entirely autonomous.

SimCorp wins "Vendor of the Year" award

In 2008, Operations Management—a U.S. trade publication focusing on operations within the financial services industry—named SimCorp "Vendor of the Year", specifically for XpressInstruments. The publication recognised XpressInstruments' potential for addressing operational risks stemming from the use of derivatives and structured products, which typically are managed on external spreadsheets or on a home-grown/in-house developed system.

An active and enduring partnership

The collaboration between SimCorp and LexiFi started with the successful integration of LexiFi's software into SimCorp Dimension. However, it did not stop there: over the years, the partners have been working jointly to help clients to address issues related to the description, valuation, risk management, and processing of derivatives and structured products. SimCorp and LexiFi also regularly share thoughts on a variety of topics ranging from financial engineering to theoretical and applied computer science.

LexiFi's technology and knowledge transfer program has borne fruit. SimCorp ably assimilated LexiFi's concepts and implementation to enhance SimCorp Dimension's support for non-standard financial products. Now SimCorp is going a step further by spreading the use of LexiFi's technology and ideas to other parts of the application. In particular, SimCorp's engineering team has developed a new user interface generation system, derived from LexiFi's original design, that will be used extensively in SimCorp Dimension, well beyond the support of only complex products.

According to Jørgen Vuust Jensen, Domain Manager – Financial Instruments at SimCorp, "the relationship with LexiFi demonstrates SimCorp Dimension's aptitude for exploiting new technology, such as LexiFi's ingenious system for describing and managing complex financial products, and the robustness of LexiFi's novel approach. We look forward to furthering our partnership with LexiFi to address the delicate challenges posed by financial product innovation."

Client Spotlight

"The relationship with LexiFi demonstrates SimCorp Dimension's aptitude for exploiting new technology, such as LexiFi's ingenious system for describing and managing complex financial products, and the robustness of LexiFi's novel approach. We look forward to furthering our partnership with LexiFi to address the delicate challenges posed by financial product innovation."

Jørgen Vuust Jensen
Domain Manager – Financial Instruments
SimCorp


SimCorp