After much deliberation, Goldman Sachs, JP Morgan Chase and Morgan Stanley have gone public with plans to work with SmartStream to develop a multi-tenanted reference data utility designed to cut the cost of integrating, cleansing and distributing data.
The SmartStream Reference Data Utility, informally known as SPReD – Securities Product Reference Data – has been on A-Team Group’s radar (and the data management community’s) for some time, with a recent update suggesting the utility is likely to be up and running in the next six to 12 months, initially supporting listed derivatives and equities and later fixed income securities.
The Reference Data Utility will be based on SmartStream’s data management service, which has been in production for about five years, and will be operated and staffed as a separate company. The utility will offer clients multi-tenant architecture, audit capabilities, complete market coverage, timely data delivery and customer defined data sourcing. It will operate 24/7 on a follow the sun basis and will support clients from locations in New York, London, Bristol, San Jose, Mumbai and Bangalore.
The founding banks of the utility will become clients and are expected to be joined by additional sell-side firms as the utility evolves. Philippe Chambadal, CEO of SmartStream, says: “The Reference Data Utility is at the forefront of an evolution in the industry with the achievement of processing mutualisation, a reduction in operational risk and an increase in service quality within the reference data management domain. Our three bank members have embraced the utility model to ensure that duplication of effort is minimised when addressing common market issues such as inconsistent data in regulatory reporting, trade breaks and risk management.”
For the participating banks, the utility is a step away from resource intense and costly internal reference data management. James Trait, managing director at JPMorgan Chase, comments: “This is a great example of how our industry can partner to improve effectiveness and reduce costs. The utility will greatly improve the quality, timeliness and consistency of reference data used across our firm to better serve our clients.”
Eric Suss, managing director and head of institutional reference data at Morgan Stanley, adds: “With growing challenges around regulation, risk management and product diversity, working together to ensure high quality reference data is in everyone’s best interest.”