Best Evaluated Prices Service Provider: Bloomberg

IRD/IMD Awards 2017

IMD/IRM Awards 2017 Best Evaluated Prices Service Provider
Max Bowie; Varun Pawar, head of evaluated pricing service; Pierce Lord, head of product, BVAL for municipal bonds; and John Tampellini, data acquisition, BVAL, Bloomberg

Bloomberg launched BVAL in 2008 with the aim of delivering a new and unique evaluated pricing service to leverage its desktop footprint and enhance transparency in its pricing models. The technology-driven service collects trade data from contributed and publicly available sources to produce valuations several times a day. When no recent trades or quotes exist, BVAL uses algorithms to find pricing data for comparable securities to derive the price of a target security.

Bloomberg has also invested in a team of evaluators that monitors the overall valuation process, builds new pricing models and provides customer support. Bloomberg Terminal users have access to BVAL pricing models, helping them understand how the price was decided. Varun Pawar, global head of evaluated pricing at Bloomberg, says: “The combination of transparency, technology and a team of individuals with a capital markets background has given us a competitive edge.”

In the past year, BVAL has continued to land notable new clients. AllianceBernstein, Capital Group and Barclays Index Business have been important wins for the vendor. Pawar says the Barclays Index team performed rigorous due diligence on the BVAL product and resources from a pricing quality and system aspect. Barclays compared prices from a sample of bonds with other existing pricing sources and the next-day trade price to assess the quality BVAL could offer. After completing the due diligence, the bank chose BVAL as the pricing source for the majority of the Bloomberg-Barclays Indices.

Growing traction in the market and integration with the Bloomberg-Barclays Indices underlines the vendor’s robust and unique offering. With regulation on everyone’s mind, BVAL plans to add datasets, which users will need to comply with upcoming regulations. “We’re looking at the Fundamental Review of the Trading Book regulation, the Markets in Financial Instruments Directive II and the Securities and Exchange Commission Rule 22e-4,” says Pawar, explaining how BVAL works closely with other product teams to provide regulatory datasets and construct liquidity risk analytics.

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