The ability of capital markets practitioners to make wise business and investment decisions is directly determined by the quality of the data supporting those decisions. Fenics Market Data’s Rich Winter discusses the benefits of sourcing data from over-the-counter (OTC) execution venues.
Why should companies buy/source private securities data directly from execution venues rather than data aggregators or vendors? What are the benefits of accessing the data directly at its source?
Rich winter, Fenics market data
Rich Winter, Global Head of Fenics Market Data and Kace Information Analytics: Historically, there has been a lack of clarity in derivatives markets and their pricing. However, regulatory changes initiated in the wake of the financial crisis that began in 2007-2008 are now on the horizon. The notional amounts of swap execution facilities (SEFs), multilateral trading facilities (MTFs), and other regulated facilities are increasing as markets evolve. This is because unlisted over-the-counter derivatives data is the only true observable data point in these financial areas. product.
Fenics Market Data has invested heavily in technology to leverage these data points, giving us a competitive advantage. The advantage of a direct relationship refers to the depth of information needed for each client’s individual use case. By using an execution venue, more types of data are available, including top-of-book, depth-of-book, modeled brokers and derivative brokers. Also, because execution locations can offer more options, a wide range of delivery options such as FTP, FIX/API, binary protocols, and cloud enable data delivery at different frequencies.
However, there are benefits and challenges associated with both direct and aggregated channels, and the appropriate delivery method depends on the nuances of each consumer. Obviously, data normalization by a vendor is the reason users use a vendor in the first place. A common API, common field IDs, common symbology, and a single contract across multiple sources are just a few of the benefits. Fenics Market Data has great partnerships with all major market data vendors and works closely to provide our mutual clients with the experience they expect from a data aggregator. However, certain datasets, including our regulatory solutions products, are only available from their original source due to the complexity and sensitivity of the data. Accessing the source therefore allows clients to access more robust datasets on the exact terms they desire.
And by going directly to the source of the data, you get a verbatim view of what’s happening in those venues, without the risk of contagion from aggregating, averaging, or indexing data. Direct sourcing allows companies to work with the raw data itself. This is a growing area of the market as data consumers become increasingly sophisticated and demand access to content at their choice.
What challenges are capital markets firms currently facing in sourcing and managing private securities data, and why? How can Fenics Market Data help?
Rich Winter: When it comes to procurement, it’s about knowing what’s out there and adapting it to a data program. The old gap between the depth and veracity of equity data and that of OTC derivatives data is rapidly collapsing. For any market participant, a global understanding of the products available in the stock market will help you better prepare for your meeting with Fenics Market Data.
Global sell-side institutions struggle on multiple fronts when procuring and managing data rights and access related to private markets. The nature of these large institutions is to collect and act on data when and where it is needed. However, multiple business units within these institutions operate with a focus on various individual projects, such as Fundamental Review of Trading Books (FRTB), Trade Monitoring, Best Execution, and Independent Price Verification (IPV). often. Obtain data for use across multiple business functions, even if they all actually require similar data.
As regulation increases data requirements for more robust datasets, Fenics Market Data helps by first and foremost providing unique data services tailored to each client’s regulatory needs, while also providing our regulatory solution data We connect teams within these large institutions through our consulting business. helps clients integrate data requirements and license rights across multiple business use cases to get the most value from the data they purchase. Data can be difficult to match and map in private markets because common identifiers such as currency exchange codes are not as widespread. Fenics Market Data alleviates this problem by providing International Securities Identification Numbers (ISINs) wherever available, as well as metadata and mapping that allows classification of the financial instrument itself along with the lineage of each order and trade. I will.
What recent milestones has Fenics Market Data achieved as a provider of private securities data?
Rich Winter: Without a doubt, the most significant milestone is effectively delivering Level 2 market data, i.e. full order book depth and trading data, across a wide range of private markets across BGC’s many venues and brands. It was something I was able to do. It is operated by a group company. This is a complete game changer from the pricing-only or indicator-type dataset offerings available in the market. We believe that Fenics Market Data is the market leader in providing this order book and trading data. Another milestone is the delivery of Insights Data to supplement order and transaction data. Insights provides services such as order and trade liquidity scores, directional momentum, aggregated trade and order volume, counts, average order size, and dominance reports for a specific counterparty.
What does Fenics Market Data consider its “secret sauce”? And how much insight, and resulting value, do the “experts behind the data” provide to clients? Or?
Rich Winter: It’s a fusion of price transparency, price discovery, and machine learning/analytics ideologies. Fenics Market Data holds a unique position by collecting data points from various all-electronic platforms such as Fenics GO, Fenics Direct, and Fenics UST. This information is augmented with observable data from the world’s largest interdealer brokers (allowing individual brokers to find the best prices available in the market), setting parameters for price transparency, and in-house Filtered through proprietary analysis to bring you the best information. We provide robust services in the data industry.
We have an expert group of market practitioners, technologists, e-commerce and data experts who own physical venues. No one knows the data and markets better than the teams of people who live and work these markets. By partnering with Fenics Market Data, you’ll get access to their team and the content we uncover and deliver every day.
What is Fenics Market Data currently focused on to strengthen its position as one of the industry’s go-to providers of private securities data? Are there any new initiatives on the horizon?
Rich Winter: We are focused on expanding our market and venue coverage through significant investments in technology and product groups. Our position as the world’s largest interdealer broker also makes us unique in the number of liquidity pools and venues we operate. The group has also acquired a number of specialist brokers, including Trident earlier this year, bringing them under its wing as a data source. As a group, we are constantly striving to strengthen our securities desk and have more planned for the future, so stay tuned to Phoenix Market Data in this area.
About Fenics market data
Fenics Market Data is a leading provider and producer of global financial, energy and commodity market data. Fenics Market Data is a division within BGC Partners, Inc. (Nasdaq: BGCP) and distributes data for the BGC group of companies, including but not limited to BGC, GFI, RP Martin, Freedom, Amerex, and Aurel BGC. It’s Tar. , Sunrise, BGC Liquidez, Perimeter Markets, and the flagship Fenics Market Data package.
Data is obtained directly from the global brokerage operations of BGC Partners and its subsidiaries, including electronic and voice brokers, global pricing systems and analytics, with enhanced coverage through Fenics Market Data’s proprietary data packages. Fenics Market Data enters into service agreements through Fenics Software Limited, a subsidiary of BGC UK.
