Bloomberg’s addition of the Financial Industry Regulatory Authority (Finra) to a growing list of organisations recognising and using its open symbology offers financial firms another step along the way to using open rather than proprietary symbologies designed to improve market connectivity and transparency, while reducing users’ costs.
Broker-dealers registered with Finra are required by the Securities Exchange Commission to report trades of corporate bonds and securitised products to Finra’s Trace Reporting and Compliance Engine (Trace) and can now do so using the Bloomberg Global Identifier (BBGID) that is part of the Bloomberg Open Symbology (BSYM) campaign.
Working together to integrate BBGIDs into Trace, Finra and Bloomberg completed the set-up on February 6 and are now offering an alternative rather than replacement option for reporting to Trace.
Peter Warms, head of Bloomberg’s open symbology group, describes his role as ‘spreading the gospel of open symbology’. In terms of the Finra agreement, he says: “Finra was among the organisations at the top of the list to approach. The market was keen to use open symbology to report to Finra and conversations with the regulator soon made clear the benefits of including it. This is a significant splash for us in terms of gaining traction in fixed income markets and we hope to see a ripple effect beyond fixed income as other organisations see the step Finra has taken.”
Besides hundreds of clients using BSYM as part of data feeds they license from Bloomberg, the company claims a long list of organisations that have adopted the open symbology. These include global exchanges such as NYSE, ACE, FTSE, Osaka and Bermuda, and third parties such as Asset Control, Flextrade, GoldenSource, Imagine Software and Murex.
A good start since open symbology was first mooted in 2009, but Bloomberg is pressing on with its pursuit to spread the word. “Working with clients using our open symbology we can approach exchanges and third parties about using the solution for the benefit of all in the financial market,” explains Warms. “Clients are frustrated by the cost of licence fees for proprietary identifiers and find some difficult to use, so we are talking to more data vendors and exchanges around the world about BBGID and have some projects in development. There will be more adoption and I expect more announcements in the second and third quarters of this year.”
The subject of Thomson Reuters proprietary RICS identifiers cannot be overlooked as Bloomberg promotes an open solution. Warms says RICS and other proprietary naming methodologies come with restrictive and expensive license agreements, adding: “Bloomberg’s open solution doesn’t have to be used in lieu of other proprietary solutions. Clients don’t have to pull out of existing services and they can use multiple symbology sets including alternative identifiers.”
A pacifier for today, perhaps, but surely not a solution on Bloomberg’s long-term road map for open symbology.