Following the launch of its Enterprise platform earlier this year, data giant Thomson Reuters is now focusing its energies on joining the platform up with its various data content sets. The vendor is also working on developing its flagship DataScope solution as the overall platform for its various data offerings on both the Thomson and Reuters sides of the business for its non-real-time content, explains Tim Rice, global head of pricing and reference data.
Rice, who has been involved in the development of the reference data business segment and the DataScope product since 2004, is in charge of overseeing this rationalisation of his division in the post-merger Thomson Reuters environment. The decision has been taken to use Reuters’ DataScope as the overall non-real-time content platform in order to fit in with the overall strategy of a more joined up approach to the market.
“This will help with the integration programme for Enterprise as it will allow for one set of application programming interfaces (APIs) to be developed,” explains Rice. “We started with the basics in the April release of DataScope and the rest of the data will be loaded over the next 12 months. The deadline for completion is in the early autumn next year.”
The vendor is also looking to other markets, such as those in Eastern Europe and Asia, to extend its footprint and realise opportunities for growth, according to Rice.
It has been a fairly quiet year in terms of news from the reference data and pricing side of Thomson Reuters’ business (the last big release was an update to its pricing solution offering back in April), but Rice explains that this is due to the intense focus on joining up its various solutions. He indicates that he believes a lot of the sound and fury coming from some of its competitors in the market is merely repackaging of solutions that have existed on the market for some time. Rather than jumping on the regulatory bandwagon, Thomson Reuters is instead attempting to improve its overall offering and its approach to the market.
To this end, the release of the Enterprise platform was effected with very little fanfare and the ensuing integration work is being conducted in the same manner. The Thomson Reuters Enterprise Platform draws on the vendor’s long serving front office Reuters Market Data System (RMDS) that supports real time data, the existing securities master product, Reuters Reference Data System (RRDS), and new technology that the company acquired through the purchase of data management specialist m35 back in 2009.
“Internally, we are looking to join up the Enterprise platform with the rest of our content and we are loading the requisite data onto the system,” says Rice. “We are also working on improving the enterprise data management platform’s interaction with applications and downstream systems for better integration.”
Enterprise, however, is not Rice’s focus within the Thomson Reuters stable and it is up to ex-m35 managing director Jason du Preez, who is now global head of the Enterprise Platform for Data Management, to oversee this work.
For his own part, Rice is closely monitoring developments in the overall evaluated pricing and reference data space. “A key focus for us in the market has been on monitoring what has been going on within the regulatory community,” he explains. “This will force more people into the market to invest in valuations data and solutions to increase transparency. Hedge funds and asset managers in general have been looking at the mark to market space in particular.”
Rice reckons the transparency aspect of the new regulations is where it gets really challenging: the move from composite quotes for pricing data to a much more granular level. “We have been receiving a lot of requests from clients around the pricing of exotic derivatives and our sales team is hearing requests for a lot of the really difficult stuff,” he explains.
Thomson Reuters is therefore trying to increase its coverage of these asset classes, especially as there is a lot of regional or country specificity for some of these instruments outside of the US. To this end, the vendor is examining the trends in the market in order to be able to map a strategy for this going forward. It is not practical to decide on a strategy from an ivory tower, the focus is on understanding the real challenges, says Rice.
Despite the intense competition in the valuations market in particular, Rice is confident that Thomson Reuters can stand its ground. “Clients look to us rather than the competition because of our broad asset coverage, especially in the exotic derivatives space. We are therefore building on our franchise for this using both in-house development and suitable partnerships. In terms of partners we are looking for analytics providers or niche regional players that cover any gaps within our offering,” he elaborates.
On the reference data side of the coin, Rice is keeping an eye on standards: “The standardisation of reference data is also an interesting area for us and we are monitoring the increased level of transparency required for structured finance issuance. Recent deals show that underwriters have been putting together loan level collateral for this. This means we have an opportunity to collect and update this data more easily as a result of new regulation,” he says.
“We are huge advocates of the move towards providing more data transparency in general. More data will mean firms can act in a smarter way than before by tracking the underlying structures of instruments,” he continues.
Rice is also sceptical that the proposals for a reference data utility, such as that proposed by the European Central Bank (ECB) or the US finance bill’s Office of Financial Research, are feasible in the short term. He notes that it will not be an insignificant task to collect, standardise and maintain the data for a reference data utility. “The idea has a lot of merit and it is similar to the idea of data collection from exchanges for real-time data feeds, consolidating the world of reference data into one place. However, it will need people to do the heavy lifting,” he says.
The pushing back of deadlines is a common occurrence amongst regulators, after all. “We have seen with the revision of the Basel deadline recently, that regulators may have started with a high watermark but they are now finding out what is practical to be executed upon. The Office of Financial Research will need to be broken down into manageable chunks, which will allow the industry to gain more enthusiasm about the project. They can start with the big picture but it needs to be practical and this means it needs to be compartmentalised,” says Rice.
If the utility is ever fully realised, the vendor community will always be able to act in a support and consultancy role, he adds. “But I don’t believe firms will be accepting of just one source of data.”