JPMorgan announces independent valuation service for OTC derivatives
JPMorgan Investor Services (JPMIS) today announced that it introduced an independent valuation service for over-the-counter ("OTC") derivatives. The service allows valuation of instruments ranging from vanilla interest rate swaps to the most exotic structured derivatives. JPMIS is the first global custodian to offer such a comprehensive OTC valuation capability as part of the fund accounting product.
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JPMIS has introduced this innovative service in response to fund managers and institutional investors moving increasingly into alternative investment products and, in particular, OTC instruments. It will provide clients with the option of receiving independently calculated estimations of fair value.
The service uses Reech FastVal, a system developed by SunGard Reech (NYSE:SDS), a provider of independent derivative valuations and risk management solutions. JPMorgan has incorporated Reech FastVal's OTC valuation capabilities into the valuation and reporting aspects of the fund accounting product.
Chris Jones, head of fund accounting product management at JPMIS in Europe said, "We administer a growing number of OTC positions because institutional investors are adopting hedge-fund orientated strategies. We are in the business of providing independent and transparent investment valuations, so this is a natural evolution."
JPMorgan has already introduced the service to a small number of clients investing in OTC products, with others expected to go live in the immediate future.