StatPro once again takes its place in the Buy-Side Technology Awards winners’ circle, this year for its efforts on the risk front with its Risk Limits Monitoring Module. James Rundle speaks with Dario Cintioli, managing director of StatPro, to discuss what distinguishes the firm in terms of is risk management technology and expertise, the regulatory landscape and how it is currently affecting the buy side, and what StatPro is focused on for the year ahead.
StatPro has won the award for best risk initiative over the past 12 months in this year’s awards. Could you tell me a bit about the module and what it does?
Dario Cintioli, StatPro: The module is called the Risk Limits Monitoring Module, and what it does is exert control over risk in many respects, such as value-at-risk, monitoring exposures and more. In particular, the module is designed around the requirements of Undertakings for Collective Investments in Transferable Securities (Ucits) and the Alternative Investment Fund Manager Directive (AIFMD), which are targeted at asset managers and hedge funds, and aims to satisfy the rules—the very detailed rules, actually—that those regulations prescribe for buy-side firms.
Risk has always been a complex area, but even more so with regulations such as those you mentioned. What are your clients expecting from systems such as yours?
Cintioli: It is true that this area is becoming tougher. Finance already comes with its own levels of complexity, such as derivatives, for example, which are extremely complex already, and the rules that are prescribed on top of that are even more complicated.
What our clients really want are solutions to these issues that are cost-effective, and that cut the timeframe of implementation, as well as iron out problems with managing the day-to-day workflow for compliance and risk management. That is what they tell us they want, and that is what we are focused on delivering.
Getting ahead of regulation has been a priority for buy-side firms for years now. As a provider to those firms, what are the areas you are focusing on?
Cintioli: We’ve been firmly in the regulatory area for the last 10 years. The first regulation in Europe designed specifically for the buy side was the first Ucits directive in 2004 in Germany, and we delivered one of the first solutions to that regulation. We’ve continued with that focus since then. What we’re doing now is focusing on the regulatory reforms and developments that are still ongoing, following the discussions between the regulators, and always trying to be in front of it ourselves.
What can we expect from StatPro in 2015?
Cintioli: Many developments are occurring over the next year. Our core platform, StatPro Revolution, does many things, not only risk management but also performance, compliance, reporting and many other areas, and we’re continuing to develop those capabilities. But in terms of risk, one interesting aspect of our enhancements for the coming year is a new model for front-office personnel, rather than regulatory compliance officers, which centers on risk-factor decomposition. This breaks down risk, and allows users to understand the sources that it stems from. The model is without residuals, so the part of diversification-grade risk is fully explained and allocated to the risk factors that are causing that diversification. W
“What our clients really want are solutions to these issues that are cost-effective, and that cut the timeframe of implementation, as well as iron out problems with managing the day-to-day workflow for compliance and risk management. That is what they tell us they want, and that is what we are focused on delivering.” Dario Cintioli, StatPro
James talks about his trip to Chicago and some of the interesting topics that came up (including a look at disaster recovery demands). Then Anthony and James touch on ISDA's initial margin rules, with Phase 3 going live next year.Subscribe to Weekly Wrap emails