Credit Suisse Launches Data Strategy Group

Credit Suisse Securities is creating a market data analysis and management team to focus on the data strategy and pricing policies adopted in equities and fixed income.

From a fixed-income perspective, the group is headed by New York-based Baldwin Smith, managing director, fixed-income research, Credit Suisse Securities. Smith, who was a speaker at the North American Financial Information Summit in New York in May, said the new centralized group will be involved in selecting data sources and policies used for pricing securities.

“This group really focuses on the data strategy,” he said, explaining that although the group is being set up now, the team has worked together on the data strategy on a more ad-hoc basis previously too. “We have our house in order,” he said.

The background for creating a central data group that sits across equities and fixed income was the increased scrutiny faced by pricing teams. Smith said the benefits of having this new centralized group will include increased transparency and improved ability to monitor prices for compliance purposes.

“Management allowed us to do something with the right people,” he said.
Meanwhile, panelists said there has been a general trend towards firms taking more evaluated pricing data and more frequent data due to increased regulatory scrutiny and focus on transparency.

New York-based Mark Abramowitz, director, taxable evaluations, Standard & Poor’s, said the challenge for vendors is to understand what each client is looking for, as the requirements differ. “Transparency means something to one person and something else to someone else,” he said.

Abramowitz also said firms seem to be doing more vendor due diligence visits. For these visits, clients may come in with a selection of Cusip numbers for securities they want to see analysts price, he explained. The visits are mostly yearly, but some would do more frequent checks too. Abramowitz said some choose to do a “deep dive” call with the vendor on a quarterly basis, where the client could learn more about how the vendor prices some hard-to-price securities.

Boston-based Kerry Ann White, managing director, global product management, BNY Mellon Asset Servicing, said some of the main changes have been around pricing hard-to-value assets, and “a lot of clients need prices more frequently.”

Firms are also looking for vendors with broad coverage, according to panelists. New York-based Bruce Manson, global head, Bloomberg Valuation Service (BVAL), Bloomberg, said this is what Bloomberg has focused on in recent years when developing its algorithm-based valuation service. “We got started in 2006, and we’ve spent five years building out the coverage,” he said, explaining that the company is constantly looking at expanding the service.