John Dukich, CEOPortfolio risk management and compliance were once considered non-requirements by investment managers as they deemed these entities to be elementary. However, since the 2008 financial crisis, a lot has been changed, making these processes and procedures indispensable parts of the investment process. Furthermore, detailed reporting sought by SEC and CFTC regulations drove financial institutions to aggregate, process, and retain large amounts of data. Set against such a backdrop is Ferential Systems, Inc., a leading provider of cross-asset trading, processing, and portfolio risk management solutions that come with compliance management capabilities primarily benefiting insurance providers, investment banks, asset managers, and corporates.
Ferential’s flagship product, Pyramid, is a multi-asset, real-time, front-to-back, trading and portfolio risk management solution for derivatives, foreign exchange, fixed income, and hedge accounting. The solution offers services such as derivative portfolio management and hedge effectiveness testing with all required documentation. It automates all aspects of hedge accounting processes and supports the quick adaptation to new procedural guidance announcements. Pyramid maintains compliance with ASC 815 and IFRS 9 analytical and reporting requirements, as well as with the upcoming wave of regulations (including Solvency II and MiFID II) by generating appropriate reports. Pyramid produces hundreds of operational reports using real-time analytics, all of which can be stored in an integrated document repository. End users of Pyramid are also provided with the ability to customize reports, browse portfolios of transactions, establish hedge relationships, and manage de-designation activity.
Unlike many of its large competitors, Ferential, with decades of experience, can undertake quick decision-making and implementation of solutions for clients due to its relatively smaller size, making it more nimble and flexible. The company works towards deriving actionable solutions for both regular and oddball scenarios faced in business workflows after cutting through the minutiae. Ferential has taken initiatives to overcome the challenges of interfacing with not only current but also old technologies, as well as facilitating the integration with different parts of an institution’s framework.
We participate with our customers on a regular basis, sometimes even daily, enabling quick responses to their business needs
“We make sure that we can migrate our systems to newer methodologies as the rules and regulations evolve,” says John Dukich, the CEO of Ferential Systems. This ensures that the company’s existing products are still compliant with changing regulatory requirements and standards like those witnessed by the hedge accounting world. In order to plan ahead for the changes to come, “We participate with our customers on a regular basis, sometimes even daily, enabling quick responses to their business needs,” he adds.
Ferential recently built a reporting tool for a large brokerage firm that enables them to effectively track compliance with the swap de minimis threshold. The system helps track all the portfolio events in order to identify those that are subject to regulatory requirements. Pyramid then translates these rules into a technology solution that allows clients to proactively identify any adverse events on the horizon. Additionally, Ferential’s Pyramid system has helped clients navigate the intricacies of supporting products such as CMBS where the remaining principal and coupons are changing monthly and require economic and operational responses.
Embracing the unique features of each client organization, financial software engineers at Ferential can adapt the user workflow to suit the client’s role and responsibility requirements. Comprehensive training is employed to maintain high expertise and knowledge of the systems at Ferential. “We have never failed on a project that we said we would do and deliver since our 1998 start,” states Dukich, with confidence.