IMD & IRD Awards 2023: Best evaluated pricing service provider—Bloomberg

Overview

Continued financial market uncertainty and volatility is increasing the demand and necessity for accurate and independent pricing. Bloomberg’s BVAL service provides evaluated pricing for over 2.7 million securities across the liquidity spectrum, including thinly traded and hard-to-price fixed-income securities.

The solution

BVAL utilizes over 1 billion pieces of data every day to supply evaluated pricing across all fixed-income asset classes. It delivers pricing for Bloomberg’s fixed-income indices, with credible, defensible, and transparent valuations. Clients have access to 11 global pricing snapshots across government, supranational, agency and corporate (GSAC) bonds, securitized products, municipals and curves, daily. BVAL pricing is available on the Bloomberg Terminal or as an enterprise data feed.

Secret sauce

Pricing quality is a critical differentiator when it comes to selecting an independent pricing vendor. BVAL uses pricing data from only the highest quality market contributors. It then filters, cleanses, and verifies this data further through capital markets specialists monitoring the process. BVAL details each step in the valuation process and provides insight into the data inputs and algorithmic methodologies used, so that firms can justify how pricing valuations are derived.

Recent enhancements

• Delivering intraday pricing on approximately 200 securities for Bloomberg’s Tradable Trackers, a suite of tradable indices
• Providing clients with price challenge API functionality to facilitate integration into the BVAL system, resulting in a 25% reduction in time to respond to client feedback
• Working on expanding BVAL’s engineering, evaluator and products team by 40%

Future objectives

• Further expansion of intraday pricing to support the Bloomberg Tradeable Tracker business, as well as other intraday use-cases in fixed-income markets
• Leveraging machine learning techniques and incorporating additional sentiment analysis to enhance grouping of similar bonds for model pricing across all asset classes
• Enhancing BVAL’s underlying infrastructure to maximize energy efficiency opportunities and increase computing capacity

Why they won

Bloomberg continues its success in the best evaluated pricing service provider category of these awards by winning it two years on the bounce. Evaluated pricing―the ability to extrapolate credible prices for fixed-income securities, many of which are difficult to price due to their infrequent/sporadic trading patterns and a lack of observable market data―is a challenge for pretty much all fixed-income market participants. Bloomberg’s BVAL service addresses the problem by consuming and digesting more than 1 billion pieces of data each day to provide evaluated prices for all fixed-income asset classes. What’s more, the transparency with which it calculates those valuations is the really crucial piece of the puzzle, providing users with comfort in the knowledge that the prices they receive are accurate and explainable.