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Standard & Poor’s Streamlines Sales, Data As Part of New Reference Data Strategy

Standard & Poor’s European group is streamlining its sales organization for reference and securities pricing services in a bid to provide clients with a single point of contact for many of its products. It is also working to integrate its data sets with the ultimate long-term aim of providing modular options on a common platform.

The new strategy is being led by European managing director Krishna Biltoo, who is responsible for leading S&P’s securities information, securities evaluations and securities classification products, and now the fund information business (formerly known as Micropal), and who talked exclusively to Reference Data Review about his group’s plans.

Biltoo says, “We have had a history at Standard & Poor’s of growing individual products organically, but we know that we now have to integrate them. Clients are no longer looking at debt or equity in isolation, but are looking at capital markets as a whole, and so our product offerings should reflect this. We have a lot of inherent value in our content sets but they will be much more valuable when offered within integrated packages.”

He continues: “Integration is not going to happen quickly but there are a series of steps that we can take. Our approach is to start from the customer end and then work backwards. As such, our first step has been to bring our independent sales and support groups for different products across our data business together under a single manager. The idea ultimately is that any of our sales groups will be able to sell all our data products.”

The restructuring of the sales organization sees Geoff Hawksworth appointed head of sales and support for Europe. The new division bring together the previously independent groups including: securities information, evaluations and classification sales and support group, headed by Rob Whitlock; investment services, previously headed by Sue Lait who has now moved on to become European head of the funds business while her sales role has yet to be filled; and the ratings origination sales group headed by Hugh Baxter. Hawksworth reports into Tom Leavitt, global head of sales and support.

A second phase will increasingly integrate content onto a common platform. This project – with the working title of FITS for Fixed Income Tool Service – is aimed at developing an integrated platform that will provide a single point of access to a wide range of content in modular form across Standard & Poor’s. This is a long-term aim. There has been work on an early prototype of FITS for market research services in Europe and North America so far. The prototype will be expanded to other content sets but full production is not expected for another couple of years.

Standard & Poor’s role of providing investment advice, however, means it has to maintain Chinese walls and ensure that the content remains uninfluenced and unbiaised. This means some data, such as equities research as well as of course ratings data, must remain separate. Standard & Poor’s index data is also currently being kept separate. Says Biltoo, “The index business is different as they are generally used within tradable products. While there is data output there are no immediate plans to incorporate this into an integrated product line.” That said, it is expected that index data will become a module within the FITS framework in the future.

Product Plans

While continuing with the high-level integration strategy, Standard & Poor’s is also working on specific product enhancements.

In the pipeline is a web-based interface for its Crosswalk product – a joint venture with Dun & Bradstreet and Telekurs to link securities to entities. The new interface, which is in addition to its existing bulk access and Crosswalk Portfolio FTP-based access, will provide online access with graphical representation of entity linkage hierarchies, says product manager Darren Purcell. A beta version will be tested in January with full release scheduled for the first quarter of 2005. The company says it recently signed up two major European clients for the Crosswalk service, although they cannot be named.

Also in the works is a front-end screening and searching application for its ratings data, in addition to the current feed delivery mechanism RatingsXpress. The new Ratings iQuery will offer a subset of Standard & Poor’s full ratings data, but will link with its research database, according to Miranda McLean, director of business development and marketing. She also says a web services version of the Ratings Xpress feed is being worked on for Q3 2005 release, essentially providing ASP-based access to the data and eliminating the need for client-site servers.

Finally, following the ending of its exclusive arrangement with Telekurs Financial for sales within Europe of its fixed income evaluated pricing, Standard & Poor’s is gearing up to increase its presence in the region. It is bolstering its sales team with some upcoming hires, and is expanding its evaluations group. It is also in negotiations with two additional distributors for its evaluations services.

Acccording to Biltoo, “While the U.S. market is generally more used to using evaluated pricing, we’re seeing an increase in demand within the European markets, primarily driven by regulations such as Basel II where clients are required to mark to market using external prices.

“Our focus is on specific securities, primarily illiquid and structured products, rather than pricing the broad spectrum of securities. With the speciality focus, the data obviously has a higher value and therefore a different price point to other services.”

As part of the ending of the exclusivity arrangement with Telekurs Financial, Standard & Poor’s gave up exclusive rights to distribute Telekurs Financial’s ValorData Feed (VDF) product within the U.S.

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