Market Conformity & Fair Value

Ensure that your transactions are executed in line with market conditions and in a traceable manner. Automate your market conformity checks and regulatory control processes. This enables you to identify potential discrepancies at an early stage and ensure transparency for clients, auditors and supervisory authorities.

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Greater control

Ensure market conformity with confidence


Regulatory requirements such as MiFID II place high demands on the traceability of transactions. Financial institutions must be able to demonstrate that transactions were executed on arm’s-length terms and that clients were charged arm’s-length prices.

abraxas helps banks, asset managers and management companies to automatically compare transaction prices with market prices or fair values. Transaction prices can be checked against both available market prices and internally or externally calculated fair values. Proven verification methods and rule-based procedures support the valuation process and identify potential anomalies.

Deviations are transparently documented and can be analysed in a targeted manner. This reduces the need for manual checks and creates a robust foundation for compliance, audit and supervision.

Your benefits

Overcoming challenges with abraxas

Challenge

What we offer

Regulatory requirements and documentation requirements
Regulatory authorities and auditors expect transparent documentation of market-consistent execution prices. Manual checks are often time-consuming and prone to errors.
Market conformity checks
Transaction prices are automatically compared with available market prices or fair values (post-trade). Anomalies are identified and documented in a traceable manner.
High audit volumes and limited resources
Numerous transactions have to be checked and valued on a daily basis. Manual spot checks often cover only a fraction of the relevant transactions.
Scalable monitoring
Our solution enables the automated monitoring of large transaction volumes and identifies potential anomalies in a systematic and traceable manner.
Lack of transparency regarding price deviations
Without structured verification processes, it is difficult to trace the causes of price deviations and to document them for internal or external auditors.
Transparent documentation and audit trail
All checks, results and decisions are documented in an audit-proof manner. This ensures transparency for compliance, audit and supervisory authorities.

Recommendation

Automated controls for transactions

QuoteControl
Market Data Management
QuoteControl

The central platform for quality-assured market data, market conformity checks and fair value checks

Market-conformity checks: Automatically compare transaction prices with market prices or fair values and identify potential discrepancies at an early stage.

Proven verification methods and rule-based procedures support the valuation of transactions and identify potential anomalies.

Traceable and audit-proof: audit trails, historical records and comprehensive documentation ensure transparency for compliance teams, auditors and supervisory authorities.

In-depth knowledge

Frequently asked questions

An arm’s-length compliance check determines whether a transaction was executed on terms that are in line with market conditions and are appropriate. This involves comparing the actual price agreed for the transaction with available market prices or fair values. The aim is to identify potential price deviations and to document the arm’s-length nature of a transaction in a transparent manner.

With QuoteControl, abraxas offers software for market conformity checks that largely automates this process and supports financial institutions in meeting regulatory requirements.

A market check verifies whether the actual transaction price achieved is consistent with the available market information. Depending on the type of transaction, the system uses two different verification methods for this purpose:

  • Market Check: For liquid trading instruments, a direct comparison is carried out against current market prices. This procedure is applied to shares, bonds (liquid only), funds (ETFs), warrants, certificates, futures, options, as well as spot foreign exchange transactions (FX Spot), forward foreign exchange transactions (FX Outright) and foreign exchange swaps (FX Swap).
  • Fair-value check: For products without directly available market prices, the system determines a plausible reference value based on yield curves, discount factors and cash flow discounting. This present value-based method is applied to money market and interest rate products (call money, L&D IAM/Periodic/Variable, FRAs, IRS, CIRS) as well as, in addition, to FX outrights and FX swaps.

QuoteControl thus supports both control paths and enables a structured, regulatory-compliant review of the defined product portfolio.

Financial institutions must comply with various regulatory requirements that demand a traceable and documented control of transactions. These include, in particular, requirements under MiFID II, MaRisk, internal compliance guidelines, as well as audit requirements from auditors and supervisory authorities.

QuoteControl supports these requirements through automated verification processes, traceable documentation and audit-proof archiving of all verification results.

Manual checks are time-consuming, resource-intensive and only scalable to a limited extent. Our solution enables the systematic monitoring of large transaction volumes and ensures consistent valuation of all transactions.

With QuoteControl, financial institutions reduce their audit workload, increase the transparency of their control processes and create a robust foundation for compliance, audit and regulatory requirements.

We recommend using only quality-assured market data for this purpose. All market data required for the checks is sourced from the clients’ market data providers and quality-assured using QuoteControl prior to a check.

Marktgerechtigkeit
Contact

Greater security for your control processes

Our experts will be happy to show you how to identify pricing discrepancies at an early stage, automate control processes and efficiently meet regulatory requirements.

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Software for market conformity checks with market and fair value checks | abraxas