Fixed Income Pricing: Are Evaluations Gaining Value?
At 01 Nov 2005 00:20:24 in A-Team Free, A-Team Free Access, Commissioned, Delivery Terms, Fixed Income Pricing, Research 
Fixed income instruments have always been difficult to price because of their diversity, volume and features, and not least because they continue to be predominantly traded over-the-counter and in many cases illiquid. And the increasing complexity of instruments, including the growing acceptance of derivatives, and tightening regulations are all putting further pressure on sources of fixed income pricing data.Given this landscape, how are financial institutions coping with the demands for pricing of fixed income securities? And given the illiquidity of many instruments and the dearth of contributed pricing sources in many areas, are evaluations gaining credibility as a pricing source?
We set out to find out:
- What are the institutions’ high level needs and preferences in fixed income data and what industry trends are driving these needs?
- What are their preferences for sources of data (brokers, vendors, selected exchanges, internal, others) and source types (contributed, evaluated, other) and why?
- Is evaluated pricing gaining credibility, generally and in Europe in particular?
- What is the perception of the current quality of third-party data available?
- What gaps in coverage exist in today’s data sources, and what are the priorities for filling them?
- What are the key factors of consideration in selecting data sources?
- And much more…
These are questions we were keen to ask our devoted Reference Data Review readers and other data managers when we embarked on our fixed income pricing data survey, commissioned by Reuters…
A-Team’s team of researchers conducted one-on-one interviews with 50 institutional money managers, fund managers, hedge fund managers, insurance firms, broker/dealers, investment banks and custodians. The executives, across the U.K., Mainland Europe and the U.S., were in roles that directly supported front office (portfolio management and trading) activities, middle office (compliance, reporting, pricing), and back office (custody, securities administration, settlement and clearing), as well as individuals within the firm that maintain the security master file.
