Fenics Market Data (Fenics MD), a division of global brokerage BGC, is building out its portfolio with the addition of a US dollar data service, FENICSMD 20/20, a premium service that combines the precision pricing of Fenics USTreasuries (Fenics UST), an electronic US Government securities trading venue owned by BGC, with real-time interest rate swaps data from BGC and US Treasuries implied spreads to the Secured Overnight Financing Rate (SOFR) – a US alternative to the discredited London Inter-Bank Offered Rate (LIBOR).
The collaboration between Fenics UST and BGC delivers increased transparency and accuracy in the bond and derivatives markets, and by combining pages, offers a comprehensive, single source of high quality data for issuers, traders, middle and back office functions. The data is available as a direct feed from Fenics MD or through the company’s distribution partners.
With the impending move from LIBOR to SOFR, and with increased liquidity starting to form in the latter, Fenics MD says it is filling a gap in the market by providing clients with Treasury spreads to the SOFR curve. Matt Woodhams, senior managing director at Fenics MD, explains: “The inclusion of US Treasuries data in Fenics MD further strengthens our position as a leading provider of market data. Fenics UST has already demonstrated tangible cost savings to traders on the platform by offering price increments of 1/16th of a 32nd when the tightest public tick-size elsewhere in the market is 1/8th of a 32nd. We believe we will be able to demonstrate similar cost savings to our market data clients over their incumbent UST services.”
Coming back to benchmarks, Woodhams says the key driver behind the move from LIBOR to SOFR in the US is to give regulators greater ‘observability’. He comments: “It all comes down to observability, regulators want to see prices quoted and traded validated in the benchmark.” Increased transparency is also expected to bring more liquidity to the market and make more data available to customers.
As well as helping clients transition from LIBOR to SOFR, Fenics MD offers support for firms transitioning to the Bank of England’s Sterling Overnight Index Average (SONIA) benchmark and will take a similar approach as firms transition to Japan’s Tokyo Overnight Average Rate (TONAR) and Switzerland’s Swiss Average Rate Overnight (SARON) benchmarks.
On a broader scale, Fenics MD is planning further development of its market data services and aggregated market data packages based on data generated by BGC’s global operations, which include 20 brokerages, and modelled by its data scientists. It is also moving into the alternative data space, initially working with internal brokerages but with the option of making alternative data services available externally, and looking at extending its data distribution and widening its client demographic.