Buy-side firms could be forced to sell their data to mitigate rising costs, a panel moderated by The TRADE’s Laurie McAughtry at the Fixed Income Leaders Summit has found.
The rising cost of sourcing and aggregating data was a key topic discussion, with all buy-side panellists in agreement that this was the most poignant issue surrounding market data.
In response to the issue, buy-side panellists were asked if they would consider selling their transaction data in a bid to mitigate costs.
“If we agree we are not going to be positively surprised around issues to do with fragmentation and cost in the next few years then you have to assess selling data as an option,” said buy-side panellist and head of fixed income trading for EMEA at Fidelity, Lars Salmon. “The give to get model is increasingly popular.”
Recently launched Glimpse Markets for example, champions this model, offering buy-side contributors a dividend in exchange for their data.
Salmon confirmed that Fidelity had developed an internal solution for aggregating data, however, as noted by him and other panellists, such a process racks up extensive development and maintenance costs.
Offering a data vendor perspective on the panel was Michele Nicoletta, VP of fixed income corporate development at ICE.
“With regard to the cost question, there are implicit costs for aggregating data,” she said. “You get what you pay for and the cost savings of having the right data must also be considered. Cost pressure is causing clients to take an enterprise approach to providers and sourcing.”
When asked what current data innovations were most exciting in the industry, panellists noted a variety of areas and solutions, including cloud solutions brought to market by Snowflake, desktop interoperability, fixed income ETFs and the transparency they have filtered through the market’s ecosystem, and the growing synergies between coding and trading.