Financial data vendor
Encyclopedia
A financial data vendor provides data to financial firms, traders, and investors. The data distributed is collected from sources such as a stock exchange
feeds, broker
s and dealer desks or regulatory filings (e.g. an SEC filing
).
.
Because of the financial investment needed to provide the services needed, the industry had become ever more consolidated, but in 2004 it was forecast that the industry was beginning to fragment.
From ticker tapes to television cameras, from databases to websites this multi billion dollar industry provides data to the trading room
s and consumers
.
The largest four financial data vendors represent the USD 15.222 billion tip of an enormous global market (2008 Annual figures
) and employ tens of thousands of people
for investment, leading to an extremely large and hard to define universe of data.
The types of data offered varies by vendor, and most typically covers information about entities (companies) and instruments (shares, bonds
etc.) which companies might issue. Typically, pricing data is sold separately from other related data, such as corporate actions and events
, valuation information
, fundamental data
including company performance and reference data
on the entities and instruments themselves.
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
feeds, broker
Broker
A broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal...
s and dealer desks or regulatory filings (e.g. an SEC filing
SEC filing
An SEC filing is a financial statement or other formal document submitted to the U.S. Securities and Exchange Commission . Public companies, certain insiders, and broker-dealers are required to make regular SEC filings. Investors and financial professionals rely on these filings for information...
).
Background
Financial data vendors have been in existence as long as financial data has been available. Financial data includes "pre-trade" such as bid/ask data necessary to price a financial instrument and post-trade data such as the last trade price and other transaction dataTransaction data
Transaction data are data describing an event and is usually described with verbs. Transaction data always has a time dimension, a numerical value and refers to one or more objects Transaction data are data describing an event (the change as a result of a transaction) and is usually described with...
.
Because of the financial investment needed to provide the services needed, the industry had become ever more consolidated, but in 2004 it was forecast that the industry was beginning to fragment.
From ticker tapes to television cameras, from databases to websites this multi billion dollar industry provides data to the trading room
Trading room
A trading-room gathers traders operating on financial markets.The trading-room is also often called the front office.The terms dealing-room and trading-floor are also used, the latter being inspired from that of a open outcry stock exchange....
s and consumers
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
.
Industry size
According to the 2009 Burton-Taylor report, the Market Data industry exited 2009 at US$22.68 billion after closing 2008 at US$23.01 billion. In 2009, Thomson Reuters and Bloomberg market share were virtually even, at 29.4% and 29.2% respectively.The largest four financial data vendors represent the USD 15.222 billion tip of an enormous global market (2008 Annual figures
) and employ tens of thousands of people
Types of data
There are many different types of instruments (including stocks, bonds, funds, options, futures, currencies, etc.) and hundreds of different marketsStock market
A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...
for investment, leading to an extremely large and hard to define universe of data.
The types of data offered varies by vendor, and most typically covers information about entities (companies) and instruments (shares, bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
etc.) which companies might issue. Typically, pricing data is sold separately from other related data, such as corporate actions and events
Corporate action
A corporate action is an event initiated by a public company that affects the securities issued by the company. Some corporate actions such as a dividend or coupon payment may have a direct financial impact on the shareholders or bondholders; another example is a call of a debt security...
, valuation information
Valuation (finance)
In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or on liabilities...
, fundamental data
Fundamental analysis
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and...
including company performance and reference data
Reference data
Reference data are data describing a physical or virtual object and its properties. Reference data are usually described with nouns.Reference data is used in data management to define characteristics of an identifier that are used within other data centric processes...
on the entities and instruments themselves.
Services offered
Most of the market differentiation between competitors is based on some combination of the following:- Delivery frequency - Data can be updated in Real-Time, Delayed, or End of Day
- Delivery method - Data is delivered either in a streaming format, or as snapshot files of streamed data, or as "end of day" files showing the position at the close of business of a certain market or region
- Delivery transportation - Data can be delivered via Broadcast, Satellite, Private Line, VPN, or Internet
- Delivery format - Data can be encoded heavily to optimize performance, or can be left in simple formats to simplifying databasing
- Normalisation - The benefit of receiving data from a vendor is normalisation. A vendor collects from sources all around the world and then translates all of those formats into a single format (by vendor or by product) for consumption by either a financial data processorFinancial data processorFinancial data processors are the next layer in the service chain between users of financial data and financial data vendors. Most data is now delivered as bits and bytes and not in a physical format. Data is fed through web pages and as "raw" data files...
or by the end user. - Reliability - High availability of data is a primary concern in the financial markets
- Value Added Services - Data value can be improved by adding on related services such as listing information, share data, fundamental data, etc.
- Local experience - Larger data vendors have sales and service offices and data centres worldwide in major financial centres in the US, Europe and Asia. This allows their customers to access local expertise without having to have a local presence.
Global nature
Many vendors began as local companies, serving their own local markets. However, through merger and acquisition and in response to the increasing globalisation of world markets, vendors now describe themselves as global.Professional Certification
The industry is largely a hidden one - both to the general public and even to some extent to its users. To begin to overcome this, in 2010, The Software and Information Industry Association introduced its Professional Certification Qualification through its Financial Services Division. By July 2011 124 professionals had passed the examination required to receive certificationList of Financial Data Vendors
- Bloomberg L.P.Bloomberg L.P.Bloomberg L.P. is an American privately held financial software, media, and data company. Bloomberg makes up one third of the $16 billion global financial data market with estimated revenue of $6.9 billion. Bloomberg L.P...
- CarryQuoteCarryQuoteCarryQuote is a privately-held company that provides integrated mobile and web access to every major exchange in real-time via smartphone, pad, or computer...
- Factset
- Interactive Data CorporationInteractive Data CorporationInteractive Data Corporation provides financial market data , analytics and related solutions to financial institutions, active traders and individual investors...
- Markit
- Moody's AnalyticsMoody's AnalyticsMoody’s Analytics provides capital markets and risk management professionals with credit analysis, economic research, financial risk management software, and advisory services...
- SIX TelekursSIX TelekursSIX Telekurs is a Financial Data Vendor and specializes in procuring, processing and distributing international financial information. Financial market specialists at SIX Telekurs gather information from all the world’s major trading venues – directly and in real-time...
- SNL FinancialSNL FinancialSNL Financial LC is a financial information firm headquartered in Charlottesville, Virginia. SNL collects, standardizes and publishes corporate, financial, market and M&A data, plus news and analysis, on more than 4,000 public companies and over 50,000 private companies in these industries:...
- SunGardSunGardSunGard is a multinational company based in Wayne, Pennsylvania, which provides software and services to education, financial services, and public sector organizations. It was formed in 1983, as a spin-off of the computer services division of Sun Oil Company, during a period of low crude oil...
- Standard & Poor'sStandard & Poor'sStandard & Poor's is a United States-based financial services company. It is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds. It is well known for its stock-market indices, the US-based S&P 500, the Australian S&P/ASX 200, the Canadian...
- Thomson ReutersThomson ReutersThomson Reuters Corporation is a provider of information for the world's businesses and professionals and is created by the Thomson Corporation's purchase of Reuters Group on 17 April 2008. Thomson Reuters is headquartered at 3 Times Square, New York City, USA...
Sources
- Software and Information Industry Association, Financial Information Services Division http://www.siia.net/index.php?option=com_content&view=article&id=138&Itemid=4
- Inside Market Data Reference http://www.imdreference.com/
- Bobsguide http://www.bobsguide.com/busint.html