ICAP and Interactive Data target OTC data conundrum
ICAP and Interactive Data Corporation have begun a collaboration aimed at making pre-trade price information more easily available for institutional investors and risk managers.
Under the deal, Interactive Data will be able to access ICAP data for interest rate, credit, fixed income, money markets, foreign exchange and energy markets. Interactive Data clients will also be able to access the ICAP data via Interactive Data desktop platforms and data feeds, covered by a direct licence between the client and ICAP.
“Sourcing content from the leading broker of interest rate derivatives, fixed income and foreign exchange helps ensure that we can deliver high quality data for those markets to our clients,” commented Emmanuel Doe, president, trading solutions group for Interactive Data. “A significant benefit of our collaboration for clients is the ability to enhance pre-trade transparency through real-time price discovery across a range of global asset classes.”
OTC derivatives markets are currently being reshaped by various initiatives in the G20 nations as part of the G20 commitment to reduce systemic risk in the global financial system. Dodd-Frank in the US and EMIR in Europe require the transfer of the bulk of OTC derivatives to centrally cleared, reported and traded platforms. Meanwhile, bilaterally-traded contracts are set to become significantly more expensive.
The reforms are intended to increase transparency, theoretically reducing the risk of a disaster in which poorly-understood complex derivative contracts are traded between firms despite their toxic contents, potentially putting the parties to the trade in jeopardy.
ICAP Information Services is a unit of ICAP’s post trade risk and information division that specialises in OTC market information.