Fixed-Income Database a Reality?

The Bond Market Association selects NEC and Niteo Partners to help get its securities-master database underway.

The Bond Market Association has taken a big step forward in its quest to develop a securities-master database for fixed-income data. The initiative began in August of 2001 under the direction of the BMA's Online Bond Steering Committee.

Joseph Sack, executive vice president of the BMA and staff adviser for the committee, says the BMA has selected NEC as its hosting facility to store the security information.

But, of course, hosting the facility for the information is not the most complicated part of the equation. So, the BMA has also enlisted the help of Niteo Partners, a technology-focused consulting firm and wholly owned subsidiary of NEC, for connectivity help. Niteo will work with the BMA and the sources of the descriptive information to figure out the best way to get the information, store it and make it available to users, says Sack.

"It was a matter of matching up experts in connectivity on behalf of the BMA," explains Sack. "We needed IT experts to help establish how information will flow from one place to another and make sure it will be accurate and meaningful when it is received and consistent with the parameters." He says that these sources include electronic-syndicate platforms, as well as certain member firms that will be providing the descriptions for the securities-master database.

The securities-master database will identify and describe a standard set of details around bond issues. The BMA plans to launch the database as a sort of portal to deliver descriptive information on bonds through a central, standardized database. By standardizing the bond descriptions, the BMA aims to streamline the process of distributing and accessing descriptions of new bond issues - from CUSIP information to yields and other terms.

Sack says that firms would then be able to refer calls, which sometimes can number in the hundreds, to the hosting-facility's portal where they could access the information in a standardized format. Currently, firms have to deal with multiple information sources for the descriptions, which may not be consistent or complete.

"We think it's extremely important for us to have fixed-income-product information in a centralized place for new issues," says Peter Murray, managing director of the Americas operations at Credit Suisse First Boston. He says that currently there are various vendor sources available for information on new fixed-income issues, which traders subscribe to, but often the information is not totally accurate or the complete set of information that they are looking for.

"On some of these bond deals there is information that is not always available from the vendors, maybe they don't capture that information or it's not one of the critical fields that they pick up," says Murray. "So through the securities-master database, the information will be available based on the criteria set up by the bond market and the dealers."

Sack estimates that within three to six months the database service will be ready to begin populating new issues. Initially, the focus will be on municipal bonds and corporate securities but ultimately that will be extended to cover all fixed-income securities. And by the middle of next year, Sacks says, the group will have a better idea of when the database will be live and usable.

"Quality is very important and we need to gain the confidence of the bond-market community," says Sack.

"The primary users of the database would be the BMA-member firms," he says. "And we will give them a choice whether to automatically receive the information on a regular basis or to access it whenever they need it."

Sack says that the information will be made available free of charge to member firms, as they are the ones providing the information and funding the initiative. Eventually, non-member firms and vendors will also have access to the information and will be charged yet-to-be-determined amounts to cover the costs of providing the service.