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 advisor for the committee, says the BMA has selected NEC as the vendor for its hosting facility to store the security information. In addition, Niteo Partners, a technology-focused consulting firm and wholly owned subsidiary of NEC, has been tapped to work with the BMA and NEC to provide connectivity help.
"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 be 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.
Sack estimates that within 3 to 6 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.
"The primary users of the database would be the BMA member firms," say Sack. "And we will give them a choice whether to automatically receive the information on a regular basis or to access whenever they need it." He 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 out to them.