The Sell Side Strikes Back

The stated reason for SPReD (Securities Product Reference Data), the working project name for a reference data utility whose creation is being driven by major sell-side firms, is to cut reference data processing costs.

It's another example of how the idea of centralizing data for different management purposes is gaining acceptance.

SPReD undoubtedly will provide value for its creators through cost savings and efficiency. It may not necessarily be a means to source security master data, however, as Aite Group's David Weiss notes. Apparently, SPReD is not intended to disintermediate the major data providers, although potential users who do already have a reference data processing service in place would be replacing such services with SPReD's offering.

If nothing else, this foray by JPMorgan, Goldman Sachs and Morgan Stanley into the reference data operations business is a recognition of the value of data, covered extensively from several vantage points in this month's Inside Reference Data features. Value can also be driven by how data is managed to support analytics, or prepared to be used for analytics.

Aggregating data in one place, as these major global firms are planning to do, is something already in practice internally at CIBC, as Allie Harris, senior director of process measurement and analytics at that firm, has said. "Leaving data where it was is not always useful when you need snapshots for what's trending," she said.

The use of agile technology has risen, taking away decision-making from the sell side, adds Asif Alam, head of enterprise capabilities, market development, Americas, at Thomson Reuters. This may be a big reason for the creation of the SPReD venture – an effort by the sell side to recover control of data management and processes.