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Derivatives Management Systems: Ready for Prime Time?

Derivatives Management Systems: Ready for Prime Time?

As popularity continues to grow in derivatives instruments, the projected IT spending in derivatives management operations is expected to surpass US$7 billion by the end of 2009.

By Sang Lee, Sang Lee

Boston, MA, December 12, 2005 – According to a new report by Aite Group, LLC, the derivatives market appears ready for prime time. With sagging returns from equities and fixed-income markets, an increasing number of firms are turning to derivatives instruments to enhance their investment performance. Additionally, the exponential growth of the hedge fund community and its active role in derivatives instruments has helped the overall expansion.

This report examines some of the key trends in the derivative market and provides an IT overview with a particular focus on the evaluation of the following major derivatives management solution providers: Calypso Technology, FNX, Misys Opics, Misys Summit, Murex, Sophis, SunGard Front Capital, and Wall Street Systems.

According to Sang Lee, Managing Partner of Aite Group, and co-author of the report, "As financial institutions continue to develop more complex, structured financial instruments, implementation of a robust, centralized derivatives management infrastructure will become a competitive differentiator." Lee also adds, "Financial institutions are actively looking to streamline their derivatives operations, and as a result, looking for robust solutions that can support multiple asset classes and provide full front-to-back STP."

This is a 57-page Impact Report. Clients of Aite Group's Institutional Securities service can download the report.