About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

A-Team Analysis: The Devil’s in the Detail for Derivatives Data

Subscribe to our newsletter

The obsession of the industry at large with over-the-counter (OTC) derivatives, in particular credit default swaps (CDSs) but also interest rate swaps and increasingly equity derivatives, is having an ever greater impact on the world of reference data.

The providers of data management systems report a growing demand from among their prospects and clients to demonstrate the capabilities of their systems in the derivatives sphere. The challenge firms face is that many of their existing core systems cannot compute the properties of complex instruments like structured products, and therefore they need their data management layers to be able to capture those trade details –

in many cases, alongside the data they are already managing to support other business lines such as equities – as a more robust alternative to the typical spreadsheet set-up in place in many middle offices currently. The onus is on the data management system vendors to ensure their products offer sufficient flexibility to accommodate complex and ever changing trade structures in rapid time-frames – and can take in details of those trades from a range of sources both external and internal “out of the box”.

With UCITS III among other factors opening up the use of derivatives for investment managers the needs of the buy side are coming more into play in the derivatives data discussion. As reported in the last issue of Reference Data Review, Standard & Poor’s is already investigating how to create packaged solutions of reference data that will be affordable to buy sides as their need to support derivatives activity grows. And speaking at the Osney Media “Optimising Derivatives Operations in Fund Management” conference earlier this month, Citisoft consultant Sean Sprackling warned his buy side audience that their greater use of derivatives would generate “very different data needs” from those they have had to handle historically. “You may need to implement different data solutions from the GoldenSource or Eagle Pace type systems you have in place today,” he said.
It is true that in many cases investment managers will have smaller budgets for data and IT than their sell side counterparts, but in the area of derivatives their needs are further complicated by the fact that from within a smaller operation they will typically be trading lower volumes of derivatives, but across a broader range of instruments – and this has implications for the value to them of some of the single instrument focused systems already in place to serve derivatives dealers. While a big sell side may not object to hooking up to multiple confirmation matching systems, for example, a buy side could find that prospect less appealing. As Markus von Crailsheim, of the OTC trade support department at Deutscher Investment Trust, said at the same conference: “We may get to use Swapswire or DTCC Deriv/SERV for free, but we still have to implement the systems within our workflows.”

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: The Data-First Enterprise: Fuelling Modernisation in Capital Markets

7 October 2025 10:00am ET | 3:00pm London | 4:00pm CET Duration: 50 Minutes In the face of relentless pressure for speed, cost efficiency, and mandates like T+1 settlement, financial institutions know their biggest risk isn’t a market crash – it’s bad data. When data is fragmented or untrusted, every investment in technology, from hybrid...

BLOG

Reporting Seen Among Use Cases Benefiting from Cloud-based Data Management for AI

Artificial intelligence is being adopted by financial regulators at pace, putting pressure on the financial institutions that the overseers serve to double down on their reporting capabilities. It’s no surprise to find that the same AI that’s helping regulators can aid organisations in getting those reporting procedures in place. To do so, however, they need...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...