Bloomberg has launched a real-time feed, called the ‘New Issues Feed’, to provide clients with access to standardised information on new issues earlier in the process than has been available, for corporate bonds, and preferred securities.
The firm has developed the service by combining its existing tagging system for new issues, using the Financial Instrument Global Identifier (FIGI), its existing news services tracking new issues, and licensing arrangements to support the flow of information within a users’ systems. Typically, new issues start with a headline, public announcement followed by additional data and terms.
Carl Daucher, head of product, core applications and insights at Bloomberg “Traders and investors read the news stories generated when a new issue is announcement. However,, but it wasn’t always clear that in conjunction with the publishing of that news story we were also simultaneously creating individual securities, and very rigidly defined securities for every single tranche covered in a new issue.”
As information evolves throughout the new issuance process, Bloomberg clients can now track these instruments in a timely manner as they are announced, updated and priced through its Data License Per Security.
“The first big change that happened, was us unlocking that data in “preliminary state”, meaning the bond has not been priced yet, for our customers to use, and that it includes a FIGI. At that point in the day, say 8.30am, there are generally no other identifiers available as they are assigned later in the day,” he says. “And so, the ability for different systems to communicate with each other about a new issue, has historically been challenging.”
The New Issues Feed can notify clients of updates to the preliminary securities, based on the latest Bloomberg News bulletins. It then allows them to set watchlist of upcoming securities that match their investment interests.
Daucher explains, “We unlocked the ability for customers to pull reference data intraday on preliminary securities. That means all of our existing clients who are consuming Bloomberg reference data on these securities, can initiate security pulls immediately once a security is created. Previously, where they had to wait until pricing occurred. With that pull they will get access to hundreds of fields associated with the new security along with a FIGI.”
Bloomberg developed a covenant to enable use of that identifier right from the time it becomes available, which required it to make sure that identifier is available to people. For example, a user could take everything that is US dollar, with a list of issuers, and pull all US dollar, fixed coupon issues. They can then potentially start pulling those securities into their systems, including the FIGI. Once that security is in a system the user should have the ability to propagate that throughout their firm. That includes the FIGI moving from a security database to an OMS, and potentially once the identifier can be flowed from one system to another in an automated fashion, the ground work is in place for more streamlined workflows.
“We want and expect that FIGI to go wherever it needs to go, and to that end we are making it available to all sorts of players to associate with security information they have in their systems,” he says. “We are investing in the tools to make that easier for firms to grab that information. So, hypothetically if a third party system has a security ID and they want to associate a FIGI with it, we have built technologies that allow them to ID a security and we will return them a FIGI.”
An example of this is Liquidnet, which publicly announced it would be using the FIGI to support its own primary market offering in October 2021.
The impact this can have on the trading desk could be significant, as traders have reported to The DESK.
“We are talking about a window of hours, but in reality the sooner firms and their service providers are able to implant that FIGI in their systems the more they are going to facilitate solutions to cross system communication.” notes Daucher. “It’s not possible for anybody in the market to prescribe one single workflow, as there is too much diversity across the buy side and the sell side and their various technology solutions. You have regional differences in terms of how different markets approach this. So, we think it makes most sense to start enabling iterative investment by multiple parties to solve the problem.”
©Markets Media Europe 2022
TOP OF PAGE
