Summit Systems (booth #4201), a front-to-back-office systems provider, has taken on the complicated world of structured products.
Over the years, the vendor has developed a system that trades and settles derivatives, fixed income, treasuries and commercial-lending products and has decided to leverage that system to trade and settle structured products. Therein lay the genesis of MUST - Multi Underlying Structured Trade.
Allen Whipple, managing director, Summit North America, says, "From a single transaction, a dealer can mix and match any components. Summit has always been a cross-asset product, but now users can mix and match any components as the dealer deems appropriate."
He explains that, previously, people would build products that were adopted for each market individually - "with MUST we are able to structure them from a single screen."
Two clients have already rolled out the product - one is Commerce Bank, which helped create and beta test the product. The other Whipple would not name. Commerce will roll out the new version this fall.
Competitors in this area have traditionally been quantitative-model providers, Whipple explains. However, although they can provide the front-end-structuring models, they cannot offer the integrated back-office solution that can price a range of instruments, handle documentation, payment, risk management and accounting, as Summit can, he claims. Whipple says that Summit will partner with some of these quant providers, as well.
Users can also add on to MUST. "Even with MUST, clients are free to augment our models with others. Sometimes we take care of interfaces for the client," Whipple explains.
The product has taken "five man-years" of development, he says, adding that he can't quantify the cost of the product's development. Summit considered purchasing or partnering with a quant-model provider, but decided it wanted total control of the system.
This is not the only product in which Summit has recently invested. Whipple says that Summit is also getting ready to roll out a new front-end application that allows users to customize their screens. By moving to an N-tier platform and using .Net, Summit has been able to relaunch its front-end, which will allow clients to deploy a thin browser-based front-end into the user-configurable application. He explains that, with this new front-end, the trader can lay out the screen the way he or she wants. "We put a lot of effort into the best technologies available to release the front-end with very rich deployment capabilities," he notes.
Historically, a user could customize the system, but it was done through a GUI builder that was released with the product. In that scenario, the customization had to be done by an IT person, now the trader can do it. "Now we have given it to the end user. They can lay out the applications on the screen the way they see fit. They can move fields around. They can create a desktop view for them or for their group. Clients can now subscribe to whatever business flows, risk, P&L workflows, whatever they need," he explains.
As for the SIA show, Whipple believes it will be a good event. He thinks there may be more people walking the floor because of the poor economy, "They'll be more focus on finding technologies that can lower costs and increase efficiencies."