Navigating Data Transparency

Last week in this space, I lauded an open approach to a reference database, as done by Omgeo adding ability to enrich data from its Omgeo Alert standing settlement instructions (SSI) platform, in a way that supports higher data quality. However, such an approach does go against the competitive nature of the financial industry.

Conversely, data consumers naturally seek transparency on sourcing of data. But they are up against the challenge created by competitive interests. "Traders, investment firms and other financial market participants do not want to publish and share their methods, says Frank Piasecki, president of New York-based market data provider Activ Financial. "They can be gamed and have proprietary investment strategies that need protection."

Just as the pursuit of higher-quality data lowers once-firm barriers, the innovation of metadata as another piece of the reference data pie means firms have to stop looking at only proprietary solutions, says Emilio Mercado, CEO of Simplified Financial Information, a New York-based market data provider. For large firms with large amounts of data to manage, the question becomes how to get a comprehensive view of data without capturing all of it, he explains.

Empowering a compliance officer to simplify data can improve control, according to Peter Esler, global head of market data at Jefferies LLC. "The challenge in regulatory compliance down the road through technology is to simplify the technology," he said.

Overall, the trade-off between transparency or openness and protecting or securing valuable information is always going to be a balancing act. As the perspectives these professionals share indicate, the question for data managers now is how to best make use of metadata and methods of more widely sharing data to get a more accurate, higher-quality targeted assessment of market information even while keeping certain pieces of their data operations proprietary.