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Northern Trust adds OTC derivatives to securities exposure analysis

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Northern Trust has expanded its securities exposure reporting for clients to include counterparties for over-the-counter derivatives contracts, in addition to more traditional investments such as equity and fixed income holdings.

The incorporation of OTC derivative counterparties on the Security Exposure Analysis available on Passport, Northern Trust’s web portal, makes it easier for clients to gather and aggregate information across multiple investments and accounts.

"Market volatility and shocks to the financial system have prompted institutional investors to take a broader, deeper view of exposures for their risk management and compliance oversight programs,” says Lenora Kelley, product manager for Northern Trust’s compliance products.

"This tool gives our clients the ability to gain a quick understanding of the impact on a fund or plan from exposure to a single entity – both market exposure from physical assets and counterparty exposure from OTC derivatives transactions – when market events occur. It is a significant development in our continuing line of innovations aimed at helping our clients understand and monitor their risks."

Clients can enter a stock ticker, security identifier or issuer name on their Passport dashboard and immediately receive total holdings in any one entity across asset types and accounts.

The tool combines market exposure from both equity and fixed income holdings with other sources of exposure such as counterparty exposure from OTC derivatives.

In addition to easier access to information through Security Exposure Analysis, Northern Trust has enhanced the detail available in client reports. This includes additional issuer exposure information such as gross and net notional values, and exposure breakout by asset category.

"In today’s fast paced environment, clients need easy access to answers, not just more data,” says Paul d’Ouville, head of Northern Trust’s C&IS global product management group. “Northern Trust continuously seeks ways to provide clients the information they need, when and where they want it, so they can focus on making informed decisions rather than aggregating data."

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