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Market Data Challenges Loom for Firms

With decreasing market capitalizations, high volatility and volumes continuing to skyrocket, financial firms are dealing with significant challenges around managing their market data.

In a Webinar sponsored by Interactive Brokers, Larry Tabb, founder and CEO of Tabb Group, was joined by panelists Martin Kullman, senior product manager for market data services at Raymond James, and Claus Thorball head of global market data at Saxo Bank, to discuss the ongoing market data challenges firms are facing.

Tabb pointed out that with decreased IT spending projected for the 2008/2009 year and cost cutting across the board, many firms are taking a serious look at their market data usage and expenditures.

Tabb set forth three distinct levels that firms can look to analyze and ultimately make decisions to more effectively manage market data in this difficult environment.

First off Tabb suggested evaluating the “easy initiatives” such as managing provisioning better and evaluating who within the firm should have data and who doesn’t necessarily need certain data sets. Rationalizing users to ensure the right data is with the right person is also key and eliminates the costs associated with “nice to have data.”

The second level would be the “medium initiatives” where Tabb said evaluating of appropriate data for appropriate functions within the firm. This would also include determining and rationalizing data redundancies.

Tabb said it’s key to ask questions such as, “do you have the appropriate dual providers and do you need both for each product, category and service level?” At this point it would also be good to evaluate what would happen if one provider went down as well as the possibility of switching out more expensive data providers for less expensive ones.

The third level is the hard initiatives that firms must decide on. This would be additional cuts to market data services in more creative ways and would require top level management buy in as most likely users won’t be too happy, said Tabb.

Kullman described how Raymond James instituted a cost-cutting strategy around market data during the past nine months to a year. “We spent a significant amount of time looking at our contracts, evaluating how we wanted to trim some costs out of those contracts, negotiating and renewals,” said Kullman.

“We had to look internally at how exactly we were using the market data and validate how we were using that data,” he added.

While the cost savings didn’t happen overnight, Kullman said the firm has already seen savings of about 10 percent on total market data spend.

Thorball said that his firm has also undergone significant review and cost cutting around market data. “We started with the low hanging fruit and have been working our way down,” he said. “Now we’re at the ‘hard initiatives’ stage and have to asses the value of each data item and decided whether we want it or not.”

He explained that last year Saxo Bank consolidated its market data cost view across the firm at all levels into one budget. “It came out as the third biggest spending area within the company following the HR budget and the IT budget,” said Thorball. “Naturally that drew a lot of attention to market data.”

Thorball said that Saxo Bank has seen between five and 15 percent cost savings over the last year. But the firm is also investing in certain areas around market data, particularly the infrastructure. “When it comes to service, connectivity lines and distribution lines there will be investment—we don’t want to compromise data quality,” he said.

According to Thorball, and a poll of participants during the Webinar, eliminating redundant providers is the area where most cost reductions are made.

“At Saxo Bank we’re providing multiple markets and using multiple markets internally and had up to three market data providers in each market,” he explained. “We have challenged that and segmented the markets into three tiers. So the top tier, or most traded markets, get full coverage and three providers. The middle tier gets two providers and the least traded markets get one provider.”

The result? “It was a difficult change from the business side but successful from a cost and redundancy perspective. And they haven’t missed the providers,” said Thorball.

Source:Advanced Trading, 03.06.2009, by Cristina McEachern

Filed under: Data Management, Data Vendor, Market Data, News, Reference Data, Risk Management, , , , , , , , , , , ,

SGX sets up Investor Education Fund to benefit Investors

Singapore Exchange Limited (SGX) is pleased to announce that it has set up an Investor Education Fund (IEF) to benefit investors in its securities and derivatives market. The IEF will support initiatives that seek to improve the understanding and ability of investors to make better informed investment decisions.

Funds of the IEF come from money collected from fines imposed for rule breaches. The Investor Education Committee (IEC) comprises both industry practitioners and senior management of SGX. They are:

  1. Mr Sia Cheong Yew, Chairman of IEC who was Supervising Editor of The Straits
    Times’ Money Desk and is now a Media Consultant
  2. Mr Ang Hao Yao, Chairman, Membership, Securities Investors Association (Singapore)
  3. Mr Lim Eng Hai, CEO, Securities Association of Singapore
  4. Mr Gan Seow Ann, Senior Executive Vice President and Head, Markets, SGX
  5. Ms Yeo Lian Sim, Senior Executive Vice President and Head, Risk Management and Regulation, SGX

The IEC will approve projects and allocate funds. It expects to disburse up to $400,000 in the first year of operation.

The IEC held its first meeting on 30 April 2009 and approved funding for two projects. One project is to produce simple, easy-to-use reference guides to assist investors in reading annual reports and help them to become active participants at annual general meetings. The second is the funding for SGX Academy programmes in collaboration with MoneySENSE, a national financial education programme. The committee also agreed to co-fund non-SGX projects that meet the IEF guidelines.

Commenting on what the committee hopes to achieve, Mr Sia Cheong Yew, Chairman of IEC said: “Our aim is to help investors to be more knowledgeable and so, be able to put their money to good use.”

“We also hope investors will learn how to seek out relevant information from the companies they have invested in so that they can keep tabs on what’s going on. With the increased understanding, investors including retail investors can play a bigger role in market activities.”

Please find the funding guidelines in Appendix 1.

Appendix 1

SGX INVESTOR EDUCATION FUND (IEF) – FUNDING GUIDELINES

  1. The funds will be allocated for the following:
    • Programmes with clear objectives to equip investors of SGX markets with knowledge and skills for better informed investment decisions;
    • Initiatives that raise the awareness of SGX supervisory issues and requirements; or
    • Initiatives that the Investor Education Committee deems to be in the interest of the market and where benefits to investor education and information can be demonstrated.
  2. SGX currently conducts promotional and educational activities for new products as part of its drive for market participation in new products. New product promotion activities, which are to be distinguished from educational activities, will not be eligible for funding from the IEF.
  3. Funds may also be used to co-fund projects of other organisations. Generally, the co-funding will be up to 75% of the cost of the programme.
  4. Amendments to these guidelines may be effected with the agreement of the Executive Committee of SGX and the Investor Education Committee. These changes will take into account emerging trends and relevant market developments.

Source: SGX 05.05.2009

Filed under: Asia, Exchanges, News, Reference Data, Singapore, , , , , , , , ,

Risk & Compliance Report March 2009: Reference Data Review

Download: RDR  Risk_&_Compliance Report March 2009  A-TEAM

The current financial climate has meant that risk management and compliance requirements are never far from the minds of the boards of financial institutions. In order to meet the slew of regulations on the horizon, firms are being compelled to invest in their systems in order to cope with the new requirements.

Data management is an integral part of this endeavour, as it represents the building blocks of any form of risk management or regulatory reporting system. Only by first understanding the instruments being traded and the counterparties involved in these trades can an institution hope to be able to get a handle on its risk exposure. The fall of Lehman Brothers and the ensuing chaos was proof enough of the data quality issues still facing the industry in this respect.

Regulators are demanding more and more data transparency from all players in the financial markets and this has meant that the ability to access multiple data silos has become essential. A siloed mentality towards data will no longer be acceptable, as these regulators seek a holistic view of positions and the relationships between counterparties.

All of this represents a significant challenge to the data management community, given that there are standards lacking in many areas, for example business entity identification. But with great challenges come tremendous opportunities to solve data management issues that have been in the background for far too long.

Source: A-TEAM Group 13.03.2009

Filed under: Corporate Action, Data Management, Library, Market Data, News, Reference Data, Risk Management, Services, Standards, , , , , , , , , ,

Corporate Actions Report April 2009 – Inside Reference Data

Download: Corporated Actions April 2009 – Inside Reference Data

This is at least what industry groups hope will happen. In fact, there is already a
working group creating an XBRL taxonomy for corporate actions, and Swift and the
Depository Trust & Clearing Corporation are both working with XBRL on the corporate
actions initiative. So even though change is not expected overnight, the development is
now a lot more encouraging than it was a year back.

Corporate actions and the issuer debate is now, in fact, becoming an important area
to follow. And with this special report, which includes comments from industry experts
and a news review, we hope to give readers the opportunity to keep on top of the latest
developments in the corporate actions space.

Source: Inside Reference Data, April 2009

Filed under: Corporate Action, Data Management, Data Vendor, Exchanges, Library, News, Reference Data, Risk Management, Standards, , , , , , , , , , ,

FIX Protocal and FISD (Financial Information Service Division) sign statement of understanding

April 16th, 2009 – FIX Protocol Limited (FPL) and the Software & Information Industry Associationâ•˙s (SIIA) Financial Information Services Division (FISD) have signed a Statement of Understanding.  FPL is a non-profit organisation that owns the intellectual property rights of the Financial Information eXchange Protocol (FIX), which is a globally-recognised messaging standard enabling the electronic communication of pre-trade and trade messages between financial institutions, primarily investment managers, broker-dealers, ECNs and exchanges.  FISD is a non-profit, member, roundtable organisation, representing firms within multiple constituencies in the securities industry focused on operational and policy issues related to financial information.

This agreement outlines a collaborative approach that will seek to further promote the use of standards to enhance straight-through-processing (STP), operational transparency, interoperability between market participants and regulators, and improved integration. These efforts will be of significant benefit to the financial services community, enabling even greater efficiencies and cost savings to be achieved.

This partnership will facilitate greater collaboration on a number of initiatives, including an agreement to work together with other industry bodies to provide leadership in the identification of reference and market data industry best practices for inclusion into international standards.  In addition to this, FPL will actively contribute to the FISD Data Model Working Group which has been formed to consolidate and extend existing instrument data models into a framework that addresses the business issues exposed by the current credit crisis.  These issues include the intermittent and inconsistent reconciliation of business and technical practices across merged and acquired platforms, and the relationship between streaming trade data and reference/proprietary information stored in multiple relational databases.

Commenting on this development Jim Northey, Co-Chair FPL Americas Regional Committee, and FPLâ•˙s Industry Standards Liaison stated˛We have had a strong relationship with the SIIA / FISD over the past few years.  This agreement provides a formal grounding for even greater collaboration moving forwards, the result of which will be of significant benefit to all industry participants in the area of reference data standards and transparency.

Bill Nichols, FISD Program Director for Securities Automation Processing, added˛As the distinctions between market and reference data become increasingly arbitrary, FISD and FPL are uniquely positioned to provide our members with a venue within which to cover all aspects of the landscape, from legal issues to down and dirty technical details.  We are pleased to formalise our combined efforts and look forward to increased collaboration in several areas.╡

About FIX Protocol Ltd
FIX Protocol Ltd is a non-profit organisation that owns the intellectual property rights of the Financial Information eXchange Protocol (FIX), which is available free of charge from the FPL website, subject to FPL˙s copyright and acceptable use policy.  FIX is a globally-recognised messaging standard enabling the electronic communication of pre-trade, trade, and post-trade messages up to settlement, between financial institutions, primarily investment managers, broker-dealers, ECNs and exchanges.  For more information, see http://www.fixprotocol.org.

About FISD
The Financial Information Services Division (FISD) of the Software and Information Industry Association providers a neutral business forum for exchanges, market data vendors, specialist data providers, brokerage firms, investment managers and banks to address and resolve business and technical issues related to the distribution, management, administration and use of market data.  Participants use the forum to exchange ideas, build business relationships and improve the business climate associated with the worldwide flow of financial information.  For more information, visit http://www.fisd.net

Source: FPL 16.04.09

Filed under: Corporate Action, Data Management, Data Vendor, Exchanges, FIX Connectivity, Market Data, News, Reference Data, Standards, Trading Technology, , , , , , , , , , ,

SZSE Shenzhen Stock Exchange rolls out XBRL information service

The Shenzhen Stock Exchange (SZSE) has rolled out an XBRL information service platform for listed companies. The platform, optimized and upgraded on the basis of the XBRL trial application website, was launched when listed companies started to unveil their annual reports for 2008.

The platform (http://www.szse.cn or http://xbrl.cninfo.com.cn/XBRL/index.jsp), serves small and medium investors, was based on XBRL standardized data and was incorporated with functions such as display, analysis and download of listed companies’ information.

The launch of the platform indicates the SZSE is heading towards a multi-layered and diversified approach for its XBRL standardized information service for listed companies.

It is noted the XBRL (eXtensible Business Reporting Language), a global standardized technology for financial information, was widely recognized and promoted across the world because it’s readable and comparable in computers and easy for data flow and data treatment.

Currently, the platform provides the query and display of XBRL document data of the reports of all 740 companies listed in Shenzhen from 2004 to 2008.

Principals from the SZSE introduced that investors can find financial indicators in an easy and quick way through the platform’s functions like information query, analysis and comparison, graph display and file download. Comparison and display of historical financial indicators of the same company or a certain financial indicator in a number of companies are also available.

Meanwhile, the application of XBRL in securities industry has a far-reaching impact in securities information disclosure. It can achieve the information share and operation of listed companies in the industry and the securities industry, pushing the standardized advancement of listed companies’ information disclosure and the securities information service industry.

By closely tracking the change of business rules and timely amending the XBRL information disclosure standard for listed companies, the completeness and consistency of information disclosure documents made by listed companies can be testified.

Source: SZSE, 18.02.2009

Filed under: China, Data Management, Exchanges, News, Standards, , , , , , , , ,

CQG Teams with Tullett Prebon Information to Provide Latin American Fixed Income, Foreign Exchange, Money Markets, and Derivatives Market Coverage

CQG, the leading analytics and order routing platform for global electronically-traded futures markets, has announced that it is adding the distribution of data for Latin American products (LatAmMarker) offered by Tullett Prebon Information, Ltd, the leading global provider of financial market data.

CQG is adding LatAmMarker to its existing coverage of debt markets, foreign exchange, money markets, and derivatives from Tullett Prebon Information. LatAmMarker includes accurate and timely prices for the region’s government debt, foreign exchange, derivatives, and local benchmarks. It also includes information from global fixed income, commodities, and money markets that correlate with the Latin American markets.

Customers utilizing CQG market data will be able to access Tullett Prebon Information’s Brazil Key Market Rates, Zero Coupon Notes, NTN-Fs, and Globals; Colombia Key Market Rates, UVRs Inflation Linked Bonds, TES, and Globals; and Mexico Key Market Rates, Cetes, UDI, M Bonds, Globals, and Swaps Composite Page in the Latin American Marker.

Mike Kirby, Head of the Americas at Tullett Prebon Information, said, “We are delighted that CQG has chosen to extend its range of data from Tullett Prebon Information to include Latin American products. We have a long-standing and successful relationship with CQG and will continue to enhance our high quality and independent financial data offering to CQG’s customer base and other clients globally.” “We are really pleased to add the Tullett Prebon Latin American coverage,” said Rod Giffen, Global Head of Sales and Support. “It’s a great complement to our multi-asset class market data offering.”

Source: Tullett Prebon 08.01.2009

Filed under: Argentina, BM&FBOVESPA, BMV - Mexico, Brazil, Chile, Colombia, Data Management, Data Vendor, FIX Connectivity, Islamic Finance, Market Data, Mexico, News, Reference Data, Trading Technology, , , , , , , , , , , , , , , , , , , , , ,

BMV – Bolsa Mexicana de Valores – New Market Data Feed “BMV in-Depth”

The Mexican Stock Exchange has designed and made available to all Mexican securities market participants a new information and analysis product called BMV a Profundidad (BMV In-Depth).

BMV a Profundidad allows users in general, issuers, stock market brokers and investors to display and watch on their monitors daily and in real time during the trading session, the 5 best stock purchase-sale positions and the most marketable Tracs (stock-referenced certificates) traded on the Mexican stock market.

With the addition of BMV a Profundidad, the Mexican Stock Exchange offers a  service provided by the developed markets and by the vast majority of the stock exchanges in the emerging markets.

Thus, deploying BMV a Profundidad will enable our Institution to compete efficiently and actively with international markets, mainly with those markets where the routing of orders is most active and where this option is in place.

The implementation of BMV a Profundidad leads to the generation of substantial benefits for the securities market as a whole and for all its participants:

•    It promotes a larger attraction of orders.
•    It favors more interest in the market.
•    Generation of liquidity.
•    Alignment with international standards for information disclosure, which will allow the BMV to compete efficiently with other markets.
•    It will promote transparence. It will guarantee equality and security in the securities market, strengthening its image and building confidence among participants.

Source: BMV 31.10.2008

Filed under: BMV - Mexico, Data Vendor, Market Data, Mexico, News, Reference Data, , , , , , , , , , ,