In such a demanding marketplace, cutting-edge technology and analytical capabilities are key.
Over the last four years, Fenics Market Data - the exclusive distributor of data for the BGC Group - has made major investments, bolstering its operations across both fronts. In FX options, for instance, Fenics Market Data’s upgrade of its systems more than doubled the number of option pairs on which the firm provides data - from 170 to over 350. New technology stacks have allowed the firm to cultivate novel datasets and deliver more accurate curves on less liquid and more esoteric instruments.
“This expansion in what we can deliver for our customers has been instrumental in our growth over the last couple of years,” says Rich Winter, global head of market data, noting that the firm’s growth rate is more than double that of the industry. “The addition of new sales staff globally has allowed us to increase our customer base more than 30% in recent years, which is very exciting for us,” he adds.
Fenics Market Data has also bolstered its headcount to complement its investment in analytics. The addition of product specialists, subject matter and tech experts have left Fenics Market Data well placed to take advantage of emerging trends. When the explosion of interest in generative AI hit the financial industry, the firm was able to turn to the AI and machine learning experts already well-embedded in its operations.
The Fenics Market Data product suite has continued to evolve in scope and sophistication. The increased regulatory focus on non-listed OTC markets is a key driver and catalyst for change across the financial industry, and prompted the firm to create a new Regulatory Solutions offering. Global banks are increasingly in need of not just data, but tools and solutions to manage an evolving landscape of new rules. Fenics Market Data provides these to help banks adhere to complex data requirements associated with the mandates and directives of the CFTC, SEC, FCA and others, world-wide.
“It’s not a case of simply providing a dataset for customers to licence,” Winter says. “When we speak to clients, we identify key issues they are facing across multiple areas and how a bespoke data solution can help solve the regulatory initiatives they have in progress such as FRTB, IPV and Surveillance. This commitment to helping our clients solve their problems is what gave rise to a leading-edge regulatory solutions offering.”
Fenics Market Data has accumulated not just historic trade data, but also data on all the “committed” or “capital-backed” orders that did not end up in a trade. The equity world calls this ‘Level 2 depth of book’ and it provides a contextualised view of the OTC markets at any given time. This capability is vital for global banks looking at past market developments to inform how they approach incoming regulation and prove to regulatory bodies that proper controls are in place.
Similarly, Fenics Market Data has made huge strides with its Independent Price Verification (IPV) operations. There is a regulatory requirement for banks to justify the market value on their positions with independent third-party analysis and data and real market observations. Fenics Market Data responded with a solution that allows banks, broker/dealers, asset managers and corporates to realise significant savings on the collateral they have to post against their positions. “We heard from our customers that this was an area of concern,” says Winter. “So we developed a product that combines independent verification, regulatory adherence and allows our clients to demonstrate sound self-governance.”
Regarding surveillance, Fenics Market Data is helping clients with their growing surveillance projects by providing data sets that reduce false positives, while monitoring for market abuse behaviours such as spoofing, layering, front running and wash trading.
The ability to remain at the forefront of regulatory developments has been a key driver of Fenics Market Data’s stellar growth trajectory. The firm was ahead of the market in helping customers manage the transition from LIBOR to SOFR, and has partnered with major market players to deliver a pioneering product for banks dealing with the FRTB regulation. “We find helping customers with these challenges deeply rewarding, and that’s helped us cultivate new business relationships and deepen existing ones,” says Winter. “Fenics Market Data has evolved from a vendor selling a dataset to a valued partner for global firms.”