Best New Data Product: IHS Markit

IRD/IMD Awards 2017

IMD/IRM Awards 2017 Best New Data Product
Max Bowie; Jeremy Reed, director; Kiet Tran, director; and John Hans, assistant vice-president, IHS Markit

In the low interest rate environment, every basis-point move counts. Each move can significantly impact fixed-income pricing, and previously acceptable pricing strategies are simply no longer appropriate. In the current market, access to frequent bond-pricing services is increasingly relevant—and IHS Markit’s win in the Best New Data Product category is a testament to this trend.

Last year, IHS Markit set out to revolutionize the bond-pricing market, unveiling a brand-new, live bond-pricing service that combines the power of machine-driven algorithms with evaluator expertise and market data. By offering users access to real-time prices for non-exchange-traded assets, the company set out to improve pre-trade transparency and offer more timely asset valuations and best execution analysis.

IHS Markit’s innovative service generates prices using intraday contributions from major market-makers and trade data captured by the vendor’s real-time parsing technology. At launch, it covered a universe of 35,000 investment-grade and high-yield corporate, sovereign and agency bonds across 40 currencies. The coverage has since grown to include a universe of 50,000 bonds across 50 currencies.

Kiet Tran, global head of fixed-income pricing at IHS Markit, says the group has had some “successful wins” since launching the live bond-pricing service last year, adding that it stands out because of the way the company leverages technology and evaluator expertise. 

Because of the nature of the fixed-income market, however, the live-pricing service is only relevant to a small portion of the 2.5 million bonds IHS Markit prices every day—but the interest seen in a real-time service underlines where the market is going. “I think the market is continuously moving towards more frequent pricing… We’re all preparing ourselves for that migration,” says Tran.

Pricing and valuation remains a key focus for IHS Markit, with more investments on the way: “We continue to invest in building out high-yield muni-pricing capabilities,” says Tran, and next will be addressing the new Securities and Exchange Commission Rule 22e-4 on liquidity risk, which requires mutual funds and other open-ended funds to establish liquidity risk management programs and thus introduce classification of liquidity of investments. “It’s about finding the key datasets and connecting with the key risk systems to solve that,” says Tran, who promises more exciting news soon.

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