To suggest Bloomberg’s introduction this month of its Bloomberg Open Symbology (BSYM) initiative is in no way connected to the recent regulatory activity in this space would be naive. Bloomberg clearly has one eye on the travails of rivals Standard & Poor’s and Thomson Reuters, both of which are having trouble with EU anti-competition investigators.
But the BSYM initiative is not, as Bloomberg would have certain, compliant sections of the media believe, the work of a bunch of nice guys who just want their clients to be happy. No, on a micro level, the BSYM initiative is the work of a data vendor that smells blood in the EU’s probe into the monopolistic market position of Thomson Reuters’ Instrument Codes (RICs).
On the macro level, meanwhile, it surely represents the acknowledgment of the inexorable decline of the market data terminal business – not just Bloomberg’s, everyone’s – as automation in trading finally takes hold and humans lose their places on the trading desk to execution engines in the data centres for all but the most complex of trades.
From a competitive standpoint, Bloomberg’s BSYM initiative is the company’s attempt to leverage Thomson Reuters’ regulatory problems in a bid to open up the closed shop of clients’ RIC environments. By offering a free alternative to RICs, Bloomberg knows that Thomson Reuters – under scrutiny for a competitive position that restricts the use of RICs in client applications except for those that use Reuters data – will be forced to loosen its RIC policy.
Last time we looked, clients had something like 50,000 applications reliant on RICs – and therefore Reuters data – to drive them. Forcing Reuters to take a position on this as it faces EU competition investigators could yield Bloomberg the opportunity to replace Reuters data in these applications with its own, opening what has heretofore been a closed door.
While Bloomberg isn’t speaking publicly about its plans, the company has launched a web-site – bsym.bloomberg.com – that outlines its intentions with respect to BSYM. The company says its goal is to provide open identifiers available to everyone in the market and allow for “freedom and flexibility in application development.”
The identifiers concerned are those used in the Bloomberg Professional service and those underlying its suite of enterprise data products. The vendor indicates that its own customer requests have prompted the move; shelling out for proprietary instrument data has long been a bugbear of the financial services market. The move is therefore likely to go down well with the user community given the often high cost involved in purchasing this data and the recessionary pressures being faced by the market, although questions remain.
Among them are Bloomberg’s future plans for the free symbology (rival Thomson Reuters has famously twisted and turn on the accessibility of its RIC codes over the years). More significantly, some observers question the usefulness of a symbology that is essentially composed of codes generated randomly by Bloomberg-proprietary algorithms (which, incidentally, Bloomberg also plans to publish) and thus lacks the kind of semantics increasingly required by clients’ pricing, algorithmic and execution engines.
These issues notwithstanding, Bloomberg seems to be going to great lengths to assure the data community and the regulators that it understands the need for instrument identifiers to be free, while taking a quick swipe at its rivals in the process. Bloomberg states on the new website: “It is common in the industry for organisations that administer symbologies to assert proprietary rights over their identifiers, impose significant limitations on their use and either charge users license fees or include their symbology licenses with the purchase of related products.” Who could they mean?
It goes on: “Bloomberg, however, is making their robust BSYM identifiers (originally developed for the Bloomberg Professional service and Bloomberg’s enterprise data products) available through Bloomberg’s website at no charge to users, with no material impediments on use.”
It contends that users can use the identifiers for a variety of uses including trading, research and mapping and it assures these users that even though they are free, it won’t let standards slide. “Bloomberg will continue to update, build, and administer its identifiers to ensure they continue to serve as effective symbols for the broad uses required in today’s financial markets,” it says.
Bsym.bloomberg.com provides a query function that allows users to find all issues relating to a particular issuer. Thus, a recent query on Vodafone yielded six pages of Bloomberg codes, relating to listed Vodafone stock, and related warrants, bonds, futures, options, indices and other instruments. Bsym.bloomberg.com provides a series of pre-defined searches, organised by asset type: commodities, corporate, currencies, equities and so on, much like the Bloomberg Professional’s hotkeys.
A set of predefined files, meanwhile, allows users to download Bloomberg codes into a flat file. The file sets available cover the same asset classes, with subsets offer a lot of granularity around specific instruments.