Best Evaluated Prices Service Provider: Bloomberg

IMD/IRD Awards 2018

IMD/IRD Awards 2018 – 61
IMD/IRD Awards 2018 logo

As regulators continue to put increasing pressure on firms to mitigate risk and introduce more prescriptive rules for valuing assets, there is persistent demand for vendors to deliver pricing services that allow firms to drill down to and understand the underlying methodology and inputs. Topping the readers’ survey for the Best Evaluated Prices Service Provider is Bloomberg with its Bloomberg Valuation Service (BVAL), which has landed the data giant the coveted award for the second consecutive year. 

Bloomberg launched its BVAL pricing service 10 years ago, storming the market with a data-driven offering that leveraged its desktop footprint to provide transparency into pricing for over‑the‑counter instruments. Since then, BVAL has grown to price more than 2.5 million securities daily, providing extensive coverage for fixed‑income and derivatives instruments, including pricing the Bloomberg Barclays Indices. Varun Pawar, global head of evaluated pricing at Bloomberg, says the evaluators that oversee the BVAL pricing also make the offering stand out, as “having a team of market experts with the ability to connect with the front office is a key advantage.”

Considering how regulation is evolving, access to the pricing team is increasingly important for customers, who are under growing pressure to scrutinize prices and be able to explain pricing methods to comply with regulatory requirements such as the Fundamental Review of the Trading Book, the revised Markets in Financial Instruments Directive and the Securities and Exchange Commission’s liquidity rule 22e-4. “Previously, the focus was on price, but now it’s about all the additional data,” according to Pawar, who says customers are now deconstructing the entire valuation process. 

With constant demand for increased transparency into how vendors derive prices, delivering enhanced transparency for clients has also been a driver for BVAL’s innovation over the past year. In 2017, one focus area was BVAL Municipal AAA Curves, which is used as a benchmark for pricing municipal bonds. While corporate bonds trade as a spread to treasuries, municipals are tax‑exempt and, as a result, trading professionals have to construct their own tax‑free AAA benchmark. 

There are now two BVAL Municipal AAA Curves, produced hourly and made available on the terminal soon after each hour. “We’ve made tremendous progress in getting our AAA benchmarks out there,” says Pawar, who explains that last year saw Bloomberg expose a lot of the information in the AAA curves to increase transparency into the pricing method, and since then the curves have also been integrated with other functions and analytics on the terminal.

 

Read more about the IMD/IRD Awards 2018 winners

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