Pricing special report


June 2014 -- sponsored by AIM Software and Thomson Reuters

Click here to download the PDF

Pain Points

For the Virtual Roundtable in this special report on pricing, Inside Reference Data asked experts what they see as the biggest pain point for pricing and valuation, particularly when trying to be transparent about sourcing.

Their answers covered several aspects, including accessing information, assessing liquidity and independence of valuations. AIM Software's Michael Walford-Grant points to the spread of information across multiple business units or applications as a big reason for difficulty of access and difficulty with getting responses to requests for transparency. Ensuing aggregation of pricing and valuation data can complicate retrieval because data collected from different systems and sources has to be reconciled and made compatible.

Thomson Reuters' Jayme Fagas points to assessing liquidity as the biggest pain point. It requires a lot of moving parts, including overall reference data, pricing assumptions and derived analytics. Particularly with fixed-income securities, priced in aggregate using reference data and performance data attributes, getting transparency for assessing liquidity is a tall order.

On the end-user side, Wells Fargo's Daniel Johnson sees difficulty achieving transparency and making efficient processes for finalizing pricing at the same time. Also, in contending with the AIFMD regulatory mandate for independent valuations, getting such valuations without the influence of fund managers is difficult, Johnson says.

Transparency and independence in pricing and valuations might very well be at odds with each other. Chasing them both might be like chasing one's own tail.

Click here to download the PDF

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