Fenics Market Data – part of BCG Group – has launched a new data service for Australian dollar (AUD) interest rate swaps (IRS) in a bid to increase market transparency.
The service – available on Bloomberg – is based in executable data and will work to reduce the risk of mispricing.
Rich Winter, global head of Fenics Market Data and kACE Information Analytics, explained that an important aspect of the new service related to the fact that the development was made in partnership with market participants.
“The power of harnessing extensive market contributions offers traders, risk and compliance officers, and managers alike, reassurance that the referencing source used by them for client trades is the broadest and most accurate reflection of real, observed prices in the market.”
Over 50% of the market contributed to the launch, with participation expected to increase to over 80% in the coming weeks.
The launch makes the service the only composite screen available for AUDIRS which is compiled from live, executable inputs from multiple market sources.
Speaking in its announcement, Fenics explained that traditionally markets have relied on single IDB reference pages, “which are only a subsection of the market, and not reflective of the broader view”. The single view heightens chances of mispricing – which regulators are looking to prevent.
The new AUS IRS service offers a complete market view, comprised of tradeable prices, as opposed to indicative data prices that are not tradeable due to the fact that the illiquid tenors are calculated by models.
Keith Nicolle, product strategist at Fenics Market Data, said: “Transactions such as Interest Rate Swaps, that are priced using a narrow, single venue price reference source, are under scrutiny from regulators concerned at mispricing for end user clients. The onus is on industry players to ensure that their price referencing sources are reflective of the whole market and not a singular view.”