Following the restructuring of the Fixed Income Risk Management Services (FIRMS) unit to combine its securities evaluations, valuations services and market research teams into one group last month, the Standard & Poor’s owned analytics and research group has launched a new transparency initiative for fixed income valuations. The vendor is now offering the assumptions data underlying its pricing and valuations via the FIRMS Global Data Solutions platform and the FIRMS Global Credit Portal, says Frank Ciccotto, senior vice president of the new Valuation & Risk Strategies group.
As part of its endeavour to establish itself as a clearing counterparty (CCP) in the OTC derivatives market, CME Group has this month selected two pricing solutions to support its CCP’s credit default swap (CDS) pricing and intraday risk management services: CMA’s DataVision and Fitch Solutions’ CDS Pricing Service. Anna Mazzone, vice president of product management and marketing at CMA, explains to A-Team Insight how DataVision will support CME Group’s OTC CDS Clearing service.
BNY Mellon Asset Servicing has invested in its client and regulatory reporting systems as a result of valuation and regulatory changes such as FAS 157 and FAS 132R-1, explains Chris Richmond, managing director of global product accounting for the fund administrator, to A-Team Insight. This has involved a significant investment in automating the upload of non-standard pricing sources and the scrubbing of same security prices from multiple sources, he elaborates.
Although ratings agency and data and risk management solution provider Moody’s experienced a positive end to the year overall in terms of revenues, with a fourth quarter revenue increase of 16.9% on the previous year’s figures, the vendor’s research, data and analytics business was down for the quarter by 1%. The risk software segment, however, performed significantly better and was up 20% on the previous year’s figures, proving the Fermat acquisition at the end of 2008 to be a canny move.
As part of its drive to compel financial services firms to provide more transparency into their data, the Financial Services Authority (FSA) has confirmed this week that it will require UK firms to publish information on how they handle complaints. According to the regulator, this will help people see how firms are performing in this area and to drive up complaints handling standards across the industry. It will also pose another data challenge for firms already facing new requirements around risk data reporting and single customer view (SCV) reforms (see 
A-Team Insight Exchange is a new event series for 2010, which will combine A-Team’s expertise in financial markets IT with thought leadership from world-class technology innovators and practical experience from financial market practitioners.
Last month, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) got together to hammer out a final definition for the term ‘fair value’. They agreed that it means an “exit price” in most markets, but in illiquid markets or those that are less active this involves the consideration of a number of variables that they have “tentatively” agreed upon. This, of course, has a significant impact on the levels of data that need to be provided alongside each price, but the lack of definitive standards is likely to prove a headache for valuations departments for some time to come.
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