About a-team Marketing Services

A-Team Insight Blogs

Talking Reference Data with Andrew Delaney: The Humpty Dumpty Factor

Subscribe to our newsletter

Humpty Dumpty famously said:

“When I use a word, it means just what I choose it to mean—neither more nor less.”

I think he was on to something.

As I move within reference data circles – recently in London, Zurich, Frankfurt and New York – I find that the term reference data can be applied to a broad church of data disciplines. Old favourites include end-of-day pricing data, security master files and identifiers, valuations, corporate actions and entity identifiers. At a stretch, we could include calendars, perhaps. Tax information. And on.

But in my travels I’ve recently noticed a propensity among reference data practitioners to get passionate – nay, even hot under the collar – about data types heretofore considered outside of our remit here at Reference Data Review.

Two in particular have piqued my interest, and in line with Humpty’s pronouncement I’m going to add them to my personal list of what I consider to be reference data.

The first is index data.

As you may recall, at FIMA DACH in Frankfurt the other week I stumbled across a panel discussion that indicated a degree of outrage at the licensing fees and fee structures of some of the major providers of index calculations and the underlying data they need to function. Indeed, the panel alerted us to the fact that the EU is embarking on an inquiry into market practices of index providers, a study that kicked off last month.

What’s clear is that in these straitened times, scrutiny of data costs is extending into new areas. The result is that index data – for some reason held until now in greater reverence than boring old market data, for example – is being put through the cost and consolidation ringer, just like everything else. It will be interesting to watch how that’s going to pan out, and you’ll be able to read about it here.

The second is benchmark pricing, and by extension the whole of the contributed data segment.

The Libor scandal has truly opened a can of worms. Not only are the culprits being castigated for lying in their Libor contributions, but the issue has forced banks to ask the question: where are we sourcing our contributed data, how is it being distributed, and to whom and for what purpose?

I’ll be looking at this in more depth in the coming weeks. But what started as a set of advertisements – bank currency rates on Reuters FXFX, for example – is now a much more serious proposition.

The consumer has changed, from a bank or asset manager counterparty making a call to the contributing bank to get a current market rate, to a machine that may take the rate and pump out a bunch of trades based on its value. And yet the process for sourcing that rate may not have changed in 30 years. Are banks aware of what rates they are posting to Thomson Reuters, Bloomberg and the rest? Do they know what systems – or spreadsheets, or people – came up with the rates? Can they stand by those rates?

We’ll be delving into this as the market wrests with how it’s going to calculate Libor (and the other bors) going forward.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: ESG data sourcing and management to meet your ESG strategy, objectives and timeline

ESG data plays a key role in research, fund product development, fund selection, asset selection, performance tracking, and client and regulatory reporting, yet it is not always easy to source and manage in a complete, transparent and timely manner. This webinar will review the state-of-play on ESG data, consider the challenges of sourcing and managing...

BLOG

SimCorp and Alloy Partnership Enables Institutional Investors to Manage Digital Assets on SimCorp Platform

SimCorp, a subsidiary of Deutsche Börse Group and provider of investment management solutions for the buy-side, and Alloy, a provider of institutional infrastructure and technology for digital assets, have formed a strategic partnership that will allow SimCorp clients to manage digital asset investments. The partnership will enable mutual clients to holistically manage digital assets, including...

EVENT

ESG Data & Tech Summit London

The ESG Data & Tech Summit will explore challenges around assembling and evaluating ESG data for reporting and the impact of regulatory measures and industry collaboration on transparency and standardisation efforts. Expert speakers will address how the evolving market infrastructure is developing and the role of new technologies and alternative data in improving insight and filling data gaps.

GUIDE

The Trading Regulations Handbook

Need to know all the essentials about the regulations impacting trading infrastructure? Welcome to the first edition of our A-Team Trading Regulations Handbook which provides all the essentials about regulations impacting trading operations, data and technology. A-Team’s Trading Regulations Handbook is a great way to see at-a-glance: All the regulations that are impacting trading technology...