CDO Software, provider of tools for users of structured credit products, has integrated the CMA DataVision same day credit default swap (CDS) pricing data into its CDO Tools suite.
Sunay Shah, CEO and founder of CDO Software says in today’s market most firms want as much transparency as possible, and that requires taking numerous different sources of data to price positions, as well as ratings coverage. “You need a diversity of ratings because not all deals are rated by every rating agency and many deals require multiple rating agency models to be used,” he says. “On the pricing side you also need to make sure you use multiple sources to make sure you’re getting a good independent aggregate so that you can feel confident that your pricing is pretty reflective of what the market’s doing,” Shah adds.
Commenting on the decision to integrate CMA DataVision, he continues: “There’s not many providers out there providing intraday pricing. We liked the way that CMA provide it; they have the right tools in place to ensure that the pricing is accurate and that there is consistency. CMA has built a good solution, the integrity is there and it’s quite diverse as well in terms of range. We need to be sure that as the market develops those that we are working with are changing with the markets too. CMA definitely are, and that helps us as well in terms of providing a solution to our clients.”
DataVision is sourced from CMA’s Data Consortium of 30 buy side firms, including investment banks, hedge funds and asset managers, who continuously provide average CDS spreads (single name CDS, indices and tranches) based on indicative observed quotes. DataVision is delivered by 5pm London and 5pm New York time, giving customers a timely market view and enabling mark-to-market and flash P&L analysis (Reference Data Review, December 2006).
Integration of new data feeds into the CDO Tools suite is a matter of “plug and play”, according to the vendor, as it already has the infrastructure in place from working with CMA and others. “Clients need a user name and log in and password et cetera, and then jobs are set up to run, whether it be intraday, overnight or whenever a client requires it, in CDO Scheduler which pulls in data for the issuer universe of names that the client is monitoring in CDO Director and will bring in all the pricing feeds that CMA provides for the universe of names,” Shah says.
He adds: “Scheduler takes feeds from providers such as CMA so that when we go to clients who already have licences in place, or are looking to get licences from market data providers, because we’re agnostic they can select whatever their preferred sources are.”
CDO has mapped the CMA DataVision file format so that the process is fully automated, it says. Mutual clients simply set-up their DataVision log-in via CDO Scheduler to get access; no further manual intervention is required. Clients get automatic access to DataVision’s same day CDS, index and tranche consensus pricing data, which is based on observed real-time indicative quotes sourced from CMA’s Buy-Side Data Consortium.
“We’ve worked with CMA to get all their data into the system in a consistent way so that clients don’t have to spend time and resources to build that n-tier environment: it’s already done,” says Shah.