DTCC Streamlines OTC Derivatives Data Access

DTCC has launched OTC Direct Connect, a service providing access to OTC derivatives transactions data that is reportable in the US and Canada. The service eliminates manual data collection and providers subscribers in derivatives markets with access to a fast and frictionless data delivery solution that can help them manage market risks and trading risk factors in near real-time.

“This solution systematically and seamlessly disseminates OTC derivatives transaction data to interested parties,” says Tim Lind, managing director of DTCC Data Services. “OTC Direct Connect improves transparency in the OTC derivatives markets, as intended by regulatory disclosure mandates, by providing subscribers with improved information access.”

UK Said to Propose Regulation of ESG Ratings Providers

The UK is to unveil plans to regulate ESG ratings providers, according to a report in the Financial Times. The proposal is expected to be announced in January, the report said Whitehall citing sources.

Any such submission would indicate a change of approach by the country’s regulators, who until now have suggested only that firms providing ratings should work to a voluntary code of conduct to help reduce confusion among investors.

ESG ratings have been criticised for offering widely different ratings from each other on the same companies, making it difficult for investors to assess which would best suit their mandates.

Broadridge Offers AI Tools to Help Asset Managers Optimise Product, Strategy and Distribution Decisions

Broadridge Financial Solutions is offering two AI-enabled analytics tools to optimise product, strategy and distribution decision-making for asset managers. DistributionAI is a natural language digital analyst tool within Broadridge’s Distribution Insight platform that provides access to proprietary global asset management market intelligence and research reports to help asset managers optimise distribution, product development, and sales and marketing.

Global Demand Model measures and analyses demand for asset management products today and in the future. It tracks over $100 trillion of global assets and uses AI-driven models to understand the relationship between asset flows and thousands of predictive capital market and macroeconomic features, coupled to human in the loop systems. This equips asset managers with more confidence in the analysis of current and future product demand.

Quantexa Opens Asia-Pacific Headquarters in Singapore

Quantexa, a provider of decision intelligence solutions, has opened Asia-Pacific headquarters in Singapore. The opening is part of a broader regional expansion plan and follows the July 2023 start of Quantexa’s Japan operations in Tokyo and long-standing presence in Melbourne, Sydney and Malaysia. Further expansion into Hong Kong is expected in 2024.

The regional headquarters will provide sales, marketing, product management, and professional services capabilities to support customer implementations of the company’s Decision Intelligence Platform. The opening of the Singapore office follows Quantexa’s recent completion of a Series E funding round led by GIC Singapore.

Australia Publishes Proposals for Sustainable Finance Strategy

Australia has outlined its proposed Sustainable Finance Strategy, including a taxonomy to help create a net-zero framework and a labelling system for green investment products.

The Treasury set out its plans in a consultation document that had been promised in December last year. It calls for transparency in reporting climate impacts and materiality.

Like its EU counterpart, the proposed Australian taxonomy would help manufacturers of financial products assess how closely their funds aligned with sustainability principles and targets. The labelling regime will focus on preventing abuse within retail investment markets.

S&P-Oliver Wyman Tie-Up Adds Physical Risk to Climate Data Service

S&P Global Market Intelligence has added climate-related physical risk metrics to its Climate Credit Analytics tool in a tie-up with management consulting firm Oliver Wyman.

The product will be powered by S&P Sustainable1 data on more than 20,000 companies to help financial institutions assess their portfolio exposure to the risks associated with climate change.

Climate Credit Analytics was launched in 2021 with Oliver Wyman. The latest addition maps corporate data across seven climate change-related hazards.

“This new release will serve banks, insurers, asset managers, asset owners and corporate risk managers to quantify climate risks in an even more thorough manner and thereby more readily integrate into business decisions and client engagement,” said Oliver Wyman partner and vice chairman of financial services for the Americas John Colas.

ESG Book Develops EM Data Tool for FII

Sustainability data and technology firm ESG Book has developed a new service for The Future Investment Initiative (FII) Institute designed to improve ESG data generated from emerging markets.

Non-profit FII enlisted the Germany-based data vendor to create the Inclusive ESG Score to help companies within the regions better report on their sustainability efforts. It is hoped this will plug a US$5.4 billion ESG investment gap in emerging markets.

The initiative was unveiled at the FII’s flagship conference in Riyadh, Saudi Arabia this week.“The Inclusive ESG Score is

a next-generation tool for investors that identifies the sustainability leaders of today and tomorrow, with a transparent, data-driven approach that is tailored to emerging markets,” said ESG Book chief executive Daniel Klier. “Through this partnership, we look forward to providing a solution that enhances investment decision-making, and in turn helps to drive greater ESG investment flows to emerging market companies.”

Substantive Research Uncovers Rapid Increases in Market Data Pricing Amidst Regulatory Scrutiny

The latest analysis of 2023 market data pricing from research discovery and analytics provider Substantive Research, reveals that market data prices are going up faster than ever, identical products and use cases are charged inconsistently, and agreements are persistently unclear.

This comes despite the Financial Conduct Authority’s (FCA) ongoing review into market data pricing practices. In August 2023, the FCA indicated that its highly anticipated Wholesale Market Data Study, due for publication in March 2024, will outline several concerns, including restrictive terms around data usage, high barriers to entry, high contract renewal charges, and a lack of meaningful innovation in the market.

Although the FCA has found that some aspects of the market prevent, restrict or distort competition, it has stated it not proposing to make a referral to the UK’s Competition and Markets Authority, believing it is best positioned to address these issues within the FCA itself.

Substantive Research’s data shows ratings agencies have increased prices by an average 12%, index providers by an average 13%, and some outliers have charged clients up to 600% more. For specific products, some consumers are paying more than 26 times than others for very similar requirements, according to the analysis.

Legal Entity Identifier Endorsed by CPMI for Use in Cross-Border Payments

The Global Legal Entity Identifier Foundation (GLEIF) has welcomed the endorsement of the Legal Entity Identifier (LEI) by the Bank for International Settlements Committee on Payments and Market Infrastructures (CPMI) ‘Harmonized ISO 20022 data requirements for enhancing cross-border payments’. The CPMI ISO 20022 data requirements establish a consistent minimum set of messaging data for more efficient processing of cross-border payments in support of G20 targets.

The CPMI has recognised the LEI as an equivalent identifier to the Business Identifier Code (BIC) for identifying financial institutions and legal entities within a payment message. Specifically, the data structuring requirements suggest the LEI and/or BIC for identifying all financial institutions involved in a cross-border payment. The LEI and/or BIC may also substitute or complement name and postal address information to aid the identification of all legal entities involved in a cross-border payment in a standardised and structured way.

Tradeweb and FTSE Russell Partner to Develop Next-Gen Fixed Income Index Pricing

Tradeweb Markets, a global operator of electronic marketplaces for rates, credit, equities and money markets, and FTSE Russell, an LSEG business, have made a strategic partnership to develop next-generation fixed income index pricing and index trading products. The firms aim to provide next-generation pricing across a broader range of fixed income securities, which will be administered by FTSE Russell as benchmarks and will deliver robust, algorithmic, and reliable pricing. The closing prices amalgamate trading activity from Tradeweb’s electronic platform, enabling closer alignment with actual trading levels and intraday pricing.

In the coming months, the firms will also continue to collaborate on fixed income pricing sets to extend coverage across multiple regions and fixed income asset classes. Over time, FTSE Russell will explore incorporating Tradeweb pricing into FTSE Fixed Income indices, starting with FTSE World Government Bond Index (WGBI), a flagship index comprised of sovereign debt from over 20 countries and denominated in a variety of currencies.

Lisa Schirf, global head of data and analytics at Tradeweb, says: “Tradeweb’s collaboration with FTSE Russell will provide clients with verified benchmarks they can use as reliable closing prices for their end-of-day trading strategies and other purposes. The Tradeweb FTSE closing prices will create a foundation across global fixed income markets for consistent end-of-day and intraday prices.”