Fund administrator or data distributor?

Just caught up with this article appeared on the A-Team website - Bloomberg is facing pressure from the industry with regards to users concerns about its initiative to make its codes freely available (see previous post Truly "Open" Bloomberg?). In the article, Max Woolfenden, managing director of FOW Tradedata, recognizes the potential of the BSYM website but advocates more progresses to be made in order to improve completeness of the data offered and in particular to clarify what exactly 'open' means.

According to A-Team, Bloomberg is also facing pressure with regards to a possible introduction of a new licensing structure for Service Provider Agreement (SPA) contracts for fund administration clients. Under the new system, fund administrators would be required 'to pay per security in each individual client portfolio', effectively changing the status of the fund manager to that of data re-distributor with all the cost increases that implies. It will be interesting to see where this heads - will the administrators simply pass the data costs through to their clients, absorb some costs as a competitive play or simply move away from using Bloomberg data? 

When is a trade, not a trade?...

...er, when it is a hedge? Adding to my current confusion over just how the Obama administration is going to define just what is and is not "proprietary trading", Gillian Tett of the FT today has put together a good article on some of unexpected effects that such a ban may have - my advice is don't mess with the all-powerful "Law of Unintended Consequencies"...

More CEP Events

Sybase have acquired Aleri according to Finextra. It was less than a year ago when the complex event processing (“CEP”) vendors Aleri and Coral8 announced their merger (see press release); there was also a big buzz when Sybase announced a CEP capability based on Coral8 and Streambase decided to offer an Amnesty Program for Aleri-Coral8 Customers (see earlier post 'Merging in public is difficult...). And only a few months later, Microsoft announced that their CEP Orinoco (now integrated with SQL Server 2008 as StreamInsight) was heading to market (see post 'Microsoft CEP surfaces as 'Orinoco').

Another sign that CEP is moving more mainstream and that real-time everything is becoming more important? Or a good market for acquisitions?

"Cut and Paste" Valuation Services

You can talk about more robust modelling, more stringent scenario testing and even moving everything onto an exchange, but unless we move the principles of good data management (in my view: consistency, security and quality of all types of data) into the front office then we will continue to get front-office mis-marking as described in this article in the FT.

Thanks to Ralph Baxter from Cluster7 for highlighting this article for me and those of you interested in this topic of operational risk and spreadsheet mis-use should maybe go along to EuSpRiG this year, and maybe take a look at a paper Xenomorph presented at a previous conference.

More Products, Less Complexity?

Decent article(and title!) explaining ETFs in FTfm today - growth of the market sounds impressive, from $40bn in the year 2000 to over $1,000bn under management now. Seemed like a bit of a day for new financial products in the FT, with the LSE announcement of opening up direct bond trading to retail investors through offering corporate bonds issued in sizes well below the usual £50,000 size (and catching up with more usual practice in Europe). Whilst not a retail product (I guess some of us already have life insurance?), longevity derivatives seem to continue their rise too in liability driven investment.

Meanwhile over on Linkedin, Structured Products magazine are asking just what constitutes a "complex" product? A decent question since complex products are not necessarily risky, but certainly "complexity is in the eye of the beholder" is most likely answer in my view - echoing a growing problem in finance, regulation and economics at the moment; there are too many people searching for the unique "right" answer to questions that simply do not have one. Maybe we should stick to the answer to everything being "42" and give up the search for the question?...