IBM and Algorithmics to Build First Advanced Risk Management System for a Securities House in China — Guotai Junan Securities

IBM and Algorithmics to Build First Advanced Risk Management System for a Securities House in China — Guotai Junan Securities

IBM (NYSE: IBM) and Algorithmics today announced they will deliver and implement a new portfolio construction and risk management solution at Guotai Junan Securities, for security trading and fund management. Guotai Junan Securities is one of the top five securities firms in China and the first in Mainland China to trade advanced financial products such as derivatives.

The combined IBM and Algorithmics solution will assist Guotai Junan Securities in forecasting risks, as well as conducting sophisticated stress and scenario testing, to help ensure risks are managed in a controlled and informed manner.

According to Zuo Feng, Chief Compliance Officer, Guotai Junan Securities, “Risk management, internal control and compliance will be some of the most important business developments in the Chinese securities industry in the years to come. To compete in this environment, Guotai Junan Securities needs to speak the international language of risk management. The organizational governance structure of Guotai Junan Securities has been established according to international standards. Now, we need to fill it with content in accordance with international standards as well.

“In developing our risk management solution and its system, we have been preparing patiently and planning for a long march in decades to come. Guotai Junan Securities is looking forward to harvesting the added values provided by this joint project with IBM and Algorithmics. Guotai Junan Securities aims to be one of China’s leading players in Securities. We believe the IBM and Algorithmics end-to-end solution and risk framework provides us with the essential tools to compete in the global securities markets.”

To assist Guotai Junan Securities leapfrog into the sophisticated world of derivative trading, the project will leverage IBM’s Risk Management Framework services — including how to optimally set limits for traders, trade index options, and trading operations structures — with Algorithmics’ Algo Risk software solution.

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