Fixed income reference data – The need for quality data and comprehensive coverage

The requirements of fixed income data present many firms with specific complexities. A highly complex and challenging asset class, fixed income comprises many categories and subcategories

Reference data and the fixed income challenge

As the data revolution continues, financial institutions (FIs) increasingly realising their fundamental need to access accurate, reliable and complete data.

Accurate data informs optimal decision-making, but is also crucial for regulatory compliance. In an evolving and dynamic regulatory environment, the complexity of changes to compliance obligations should not be underestimated, and a proactive approach to managing such change begins with ensuring access to trusted and reliable data.

In short, data has become a lifeblood for FIs, and reference data – both static and dynamic data used to help classify and describe the individual characteristics of specific financial instruments – is no exception.

Under the umbrella of reference data, accessing complete fixed income reference data presents many firms with specific complexities. Fixed income is a highly complex and challenging asset class, comprising myriad categories and subcategories. Accessing sufficient reference data across such a vast and complex asset class is consequently a challenge for many firms.

Unsurpassed coverage 

Refinitiv delivers unsurpassed depth and breadth of reference data coverage across a wide range of asset classes, including fixed income. Refinitiv’s coverage is global, spanning more than 130 markets, and it is able to meet a diverse range of customers’ fixed income data needs.

Within the fixed income asset class, Refinitiv offers comprehensive coverage of several subcategories, including:

• Government and corporate bonds
• Convertible bonds
• Mortgage-backed securities and securitised products
• US municipal bonds
• Bank loans
• Structured notes.

Refinitiv is well placed to meet data needs, and for this reason, some of the world’s largest FIs place their trust in its data:

• Refinitiv delivers trusted terms and conditions data for more than 3.5 million live (active and tradeable) instruments, and over 11 million inactive fixed income instruments, catering to both desktop and enterprise data requirements.
• It is a trusted provider of primary market data and corporate actions notifications, and delivers cross-reference identifiers, credit ratings and derived value-added content.
• Its coverage of convertible bonds is unsurpassed, incorporating global data spanning more than 20 years. The complexity of the terms of these instruments is fully quantified and represented, which allows users to power sophisticated valuation tools. Moreover, the terms of the convertible asset class are uniquely dynamic, with approximately 3% of the global universe changing daily. This means that rigorous maintenance of conversion ratios and volume outstanding is essential. Refinitiv’s dataset has a reputation for excellence in this regard.

Refinitiv also regularly expands the scope of its data model to better represent the complex and evolving nature of debt instruments.

Quality and expertise 

To ensure quality, Refinitiv data is subject to an extensive range of controls. We collate data from a range of trusted sources, including exchanges, issuers and underwriters. This data is thoroughly checked and rigorously maintained by global teams of data analysts and experts who actively monitor data quality and continually improve processes. Many of these staff speak local languages and are closely connected to local markets.

Refinitiv’s data is available to users across a range of delivery platforms and benefits from its proprietary Refinitiv identifier system, PermID^®. This means Refinitiv’s reference data is linked to entity, quote and market venue data to enable better navigation and enhanced data discoverability.

Tangible help 

Refinitiv’s fixed income reference data offers tangible help to FIs, many of which are navigating some complex industry-wide challenges.

Regulatory data

Since the launch of the revised Markets in Financial Instruments Directive (Mifid II) in January 2018, fixed income reference data has become instrumental for financial professionals as they strive to comply with ever-growing regulatory obligations.

Over the past three years, Refinitiv has built a range of fixed income regulatory data solutions to help the financial industry meet strict transparency and reporting requirements, and will continue to respond to changing market needs.

To best support clients, Refinitiv receives new data from external sources – such as the European Securities and Markets Authority and the Derivatives Service Bureau – but also derives new content to support external taxonomies.

The Libor transition

Libor will be phased out by the end of 2021 and replaced with alternative risk-free rates (RFRs). This transition will require a substantial investment of time and effort, and it is of the utmost importance that firms develop a structured response, including ensuring access to the right data, to allow a seamless transition phase.

Refinitiv has responded promptly and proactively to meet evolving data needs over the Libor transition. For example, its bonds and loan data model has been enriched with new data attributes to offer much-needed support to clients managing the intricate process of migrating their portfolios of debt instruments to the incoming RFRs.

Looking ahead – 2021 and beyond 

As the financial services industry looks ahead to 2021, Refinitiv remains committed to delivering the reference data and functionality firms need to succeed in a challenging marketplace.

• Refinitiv understands that its clients work to strict deadlines and rely on timely data delivery to meet their many obligations – both regulatory and otherwise. Its proactive approach therefore sees it constantly optimising its data offering. In 2021, it will specifically be responding to client needs for the more timely provision of data, and is working to deliver new fixed income issues while building a more robust and scalable solution that will improve the speed of its data provision.

At Refinitiv, we are acutely aware that time is money and we are therefore taking a proactive approach to meeting our clients’ collective need to access new bonds data in a more timely manner

Jaroslaw Jarzecki, Refinitiv

• Refinitiv is also improving its representation of sustainable fixed income bonds. Environmental, social and governance (ESG) investments continue to gain in the popularity stakes as investors increasingly appreciate the importance of factoring sustainability into their portfolios. The fixed income market has a vital part to play in the unfolding global shift in investor behaviour. Refinitiv is witnessing a host of changes – from the introduction of new types of bonds to new industry guidelines and updated regulatory oversight – all of which lead to increased demand for relevant reference data. Refinitiv is consequently working to deliver the data its customers expect in line with this global trend.

Given the importance of reference data in any institution, it is important for FIs to choose the right data partner. In particular, they should seek a global provider able to source and verify substantial data at scale, and one with a reputation of ensuring the accuracy, completeness and timely delivery of data at all times and across even the most complex asset classes.

With constant and secure access to trusted data, institutions can navigate regulatory change, make more informed decisions, and boost the efficiency of their day-to-day operations with greater ease and clarity.

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