Interactive Data Increases Transparency of Evaluated Pricing to Decrease Risk

Interactive Data has upgraded its Vantage web application for evaluated pricing transparency to Version 2.0. The upgrade offers a significant expansion of instrument coverage, from 125,000 securities in Version 1.0 to 2.8 million in Version 2.0, and improved compliance and risk management through greater transparency of the firm’s evaluated pricing in the fixed income market.

The securities expansion adds global structured securities and US municipal bonds to the global corporate and sovereign bonds data available in Vantage Version 1.0. Version 2.0 also includes a market depth indicator that gives more transparency on the types of information used in evaluations and includes a summary view of quotes and trade information available at the time of evaluation, and an events panel that shows non-trade and quote information, such as news and corporate actions, that could impact a security and is considered by the Interactive pricing evaluation team.

Says Anthony Belcher, director of EMEA valuations at Interactive Data: “We focussed on the inclusion of the full universe of structured instruments and US municipal bonds in Version 2.0 as these asset groups are the largest held and traded by our clients. The transparency of pricing evaluations we can now offer meets accounting regulations for more disclosure of the derivation of fair value and will also help clients meet some of the requirements of MiFID II, such as the need to show that prices offered in the market are based on current values. The additional transparency also means Vantage provides a clearer view of risk as there is more detail with which to assess and check independent pricing and how it has been reached.”

Improvements in transparency are matched by enhancements to workflow tools such as those that support users loading portfolios into the application for assessment and review. “The Vantage workflow was built for review and analysis of fund valuations and is therefore much more efficient than spreadsheets,” says Belcher.

Looking forward, he says the next development focus for Vantage is on operational risk management and more workflow extensions. Improvements to risk management will include the ability for multiple rather than single sourced prices to be loaded into Vantage for review and comparison, while greater flexibility in workflow is expected to allow users to customise the solution more closely to their needs.

Belcher says Interactive Data is working with clients to build out these features of Vantage and hopes that some of the 5,000 users of the company’s pricing evaluation services will join the 100 financial institutions already using Vantage Version 2.0.