Sell-Side Technology Awards 2013: Best Sell-Side Market Risk Product ─ LCH.Clearnet

LCH. Clearnet's SwapClear Margin Approximation Risk Tool (SMART) allows users to simulate portfolio risk exposure and perform "what-if" calculations, on an individual trade or at the portfolio level, prior to clearing. One only needs to look at LCH.Clearnet's client roster-a veritable who's who of the largest sell-side firms across the capital markets-to appreciate the breadth of scope and extensive sell-side traction that the London-based clearinghouse enjoys, irrespective of the region and the size and complexity of the institutions in question. Because of SMART's deep risk management functionality and the firm's size and global reach, LCH.Clearnet was named best sell-side market risk product provider at the inaugural Sell-Side Technology Awards.

Ease-of-use has been a key driver for SMART's success, allowing clients to monitor various risk exposures from a single dashboard, without having to click through multiple tabs. Users can filter reports at the trade or counterparty level, view valuations to see where sensitivities lie, and model portfolios under various scenarios. Additionally, they can view margin estimates at the time of trade execution.
Another growing trend in the realm of risk management is the need to run regular, accurate stress-tests, which SMART supports, as well as the ability to calculate trade-level Net Present Values (NPVs). According to LCH.Clearnet, SMART differs from other central counterparty (CCP) clearing tools in that it "ensures speed, reliability and a lack of dependency on CCP capacity constraints."

SMART, deployable as a Java application or as a Microsoft Excel desktop tool, allows users to view valuations to see where sensitivities lie and model portfolios under various scenarios. In March this year, the company updated SMART to allow for first principles modeling, allowing users to simulate market conditions based off of real market behavior.

In December 2012, LCH.Clearnet, created by the merger of the London Clearing House and Clearnet, won the award for best risk analytics initiative at Waters' annual American Financial Technology Awards.

Ease-of-use has been a key driver for SMART's success, allowing clients to monitor various risk exposures from a single dashboard, without having to click through multiple tabs. Users can filter reports at the trade or counterparty level, view valuations to see where sensitivities lie, and model portfolios under various scenarios.