In a move that may bolster municipal bond market transparency, S&P Capital IQ has unveiled a new intra-day muni bond pricing service.
Standard & Poor's Securities Evaluations, a unit of S&P Capital IQ, on Monday said the new service will let users track pricing on over 3 million bonds throughout the trading day.
The service is designed to help portfolio managers comply with a new Securities and Exchange Commission rule that requires institutional money market funds to calculate floating Net Asset Values.
Under the existing model of end of day evaluations, floating NAV funds may now no longer be able to offer same day settlement, the firm said.
The SEC's new rule pushes investment firms to calculate multiple NAVs throughout the day, to give shareholders intraday liquidity at prevailing market prices. The service will provide updated pricing on munis at noon and at 4 p.m., ET. SPSE is considering adding a 9 a.m. time slot as well.
"The intraday pricing of money market funds seeks to better facilitate same day settlement of money market transactions," Greg Carlin, S&P Capital IQ Vice President, said in a press release.
SPSE uses proprietary methodologies in evaluating muni prices. The firm directly observes muni market trades and when it can't see trades or they are limited or unavailable, it uses tools to arrive at a price based on relevant market factors. It also groups bonds with similar characteristics which lets the firm evaluate prices of securities that have similar trading characteristics.
