Risk Management Briefs

The International Securities Exchange -- an electronic U.S. options exchange -- is connecting to a communications infrastructure developed by Con Edison Communications (CEC) for the Securities Industry Automation Corporation (SIAC). In a project to be completed next month, CEC will provide ISE with primary and business-continuity-protection services using its 1-Gigabit PowerWave Wavelength and PowerLan Ethernet Services. ISE will use the services to connect to four SIAC locations.

Citisoft, an investment-management consultancy, launched a Risk and Performance Service aimed at helping asset managers to deliver cost -effective solutions required for analyzing, presenting and managing risk and performance. Citisoft notes that the measurement of portfolio risk against client objectives is considered essential and that it is now common for client mandates to include performance targets. The service can help asset managers receive more value from their investment in risk and performance analysis, the consultancy contends.

Eurex will attempt to enhance the efficiency of netting risks for derivatives transactions through so-called cross margining. As of June 2, 2003, offsetting risks from positions in derivatives on equities and indices in the same sector will be netted in the calculation of margin payments. Bundling the margin collateral reduces the margin requirements for Eurex customers and also the costs for providing for collateral by as much as 50 percent, according to the international derivatives market. Effective immediately, Eurex will accept the fixed-income ETF eb.rexx Government Germany EX as collateral in Eurex Clearing AG.