Stress Testing

  • Leading independent stress testing service
  • Asset classes, product types and flexible reporting
  • Full compliance tool for structured product issuance

In March 2012 the UK regulator issued detailed guidance for product development and governance processes for structured products. A central part of this guidance was the formalising of the concept of "stress-testing" of structured products prior to issuance. The purpose is to ensure products represent value for money and have prospects suitable for the intended investor base. In 2015 the FCA issued further guidance including an assessment of how market participants had progressed since the first paper.

In response to these regulations, FVC first developed a reporting service for its institutional clients which it brought to market in late 2012. As our clients' experience and requirements evolved we developed our service to provide greater flexibility in methodology and reporting. We launched our portal service to allow our clients to perform instant analysis of their products and track their issuance channel much more effectively. We also provide an API solution for clients needing to perform high volumes of calculations. The system can also do all calculations as required for the Key Investor document (KID) under PRIIPs which went live in Europe in January 2018.

Our service has been adopted by many investment banks and distributors. We believe that this is due to our extensive modelling capability, wide underlying coverage, the flexibility of the analysis and reporting, provision of compliance and workflow tools, all fully supported by our dedicated team of analysts.

We have also tailored this service to be relevant for international structured products markets and regulatory regimes to ensure due diligence and compliance of product issuance pipelines. The FCA was one of the first regulators to set out its requirements on structured products in detail but similar paths have now been followed in different countries and we believe that this is set to continue. Being able to demonstrate proper processes protects institutions from future regulatory or liability problems and we believe that our service provides a very robust solution.



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