Data giant Bloomberg is seemingly facing a degree of pressure from the industry with regards to both its planned service provider agreement (SPA) contracts for fund administration clients and the data provided via its Bloomberg Open Symbology (BSYM) initiative. Paris-based data association Commission des Services et Systèmes d’Informations destinés aux Opérateurs de Marchés (Cossiom) has been in negotiations with the data vendor for some time with regards to the introduction of a new licensing structure for SPA contracts that would mean they would have to pay per security in each individual client portfolio.
Cossiom, which is a member of the Information Providers User Group (IPUG), has formed a working group to put pressure on Bloomberg to retain the old contract structure so that these fund administrators are not forced to pay several times for the same data. According to attendees at the recent IPUG conference in London, Bloomberg has yet to provide an official response to this request but has not yet introduced the new fee structure, despite the fact it was planned for the start of January.
The new fee structure, should it be introduced, would require fund administrators to pay US$1 per security, per month, per portfolio on top of the current data license that they currently pay to the vendor.
Jean-Pierre Gottdiener is the Cossiom working group coordinator for the endeavour and IPUG’s Deborah McAdams is handling the issue as liaison to the group.
As well as facing scrutiny over this new pricing structure, Bloomberg is also facing pressure from a number of users concerned about the missing attributes being provided as part of its BSYM initiative. The vendor launched the initiative to provide its own proprietary financial instrument codes to the market at no charge to users via a new website late last year. The identifiers concerned are those used in the Bloomberg Professional service and those underlying its suite of enterprise data products and Bloomberg indicated at the time that its own customer requests have prompted the move.
After all, shelling out for proprietary instrument data has long been a bugbear of the financial services market and regulators are also displaying a fair amount of interest in the space (see the European Commission’s investigation of Cusip Service Bureau’s International Securities Identification Numbers (ISINs) for North American securities or Thomson Reuters’ Reuters Instrument Codes (RICs) for proof ).
Mark Woolfenden, managing director of FOW Tradedata, explains the perceived benefits of the move: “By publishing the BSYM public access website Bloomberg has on the face of it paid more than lip service to their stated position of opening up their proprietary symbology. Many client users of the Bloomberg Data Licence (BDL) have proprietary methods of processing the BDL feed to first extract series level identifiers and then to map these to other key vendors’ symbols held in their instrument identifier masterfiles. This overhead in feed processing along with manual exception management has long called for this to be an outsourced service which has been available for other market data and independent software vendors’ (ISV) symbols for many years.”
However, the data offered via the website is, as many at the IPUG event testified, incomplete. Woolfenden elaborates: “From a standing start the BSYM website heralds great potential but still lacks some missing attributes that can allow a robust Bloomberg Identifier mapping process to exist in an automated environment. Bloomberg has, however, a fine balance to achieve between cannibalising existing revenue linked indirectly to how its identifiers are used in trading operations and delivering on its promise of open symbology. Take corporate actions for example which could, by default, be inferred from daily wholesale BSYM snaps taken from the regularly refreshed website.”
FOW Tradedata is just one of the parties discussing these issues with the data vendor and Woolfenden is hopeful that progress will be achieved soon. “We expect further progress shortly on what we understand is an unravelling internal management debate at Bloomberg on exactly what ‘open’ really means for its symbology and the potential affects on the company. Overall though, one of the main benefits of this initiative is that a positive dialogue can now be had with Bloomberg in an area that was taboo up until only recently.”
So, the vendor has seemingly gone some way to opening up a dialogue on the subject of securities identifiers, but there is much more to be done before it can truly declare itself to be “open”.