The partnership allows Lumesis's DIVER Advisor platform to use MBIS's pricing and comparable bond data. MBIS's information is aggregated bid and offer data on municipal bonds compiled by the 11 firms — including 10 that specialize in municipal inter-dealer brokerage — that form MBIS, according to a report provided by MBIS.
"[This partnership will enable] users to click on and access a bonds to see any trade activity or any bid and offer not only for their bond, but trade or bid activity for comparable bonds," Gregg Bienstock, CEO and Co-Founder of Lumesis, said in an interview.
The MBIS data provides observed secondary market pricing information in aggregate that can be leveraged by Advisor platform users in pre-trade investment decision-making, according to the press release about the partnership.
"[Information provided by this partnership will allow] an advisor to demonstrate how they performed research in support of getting a client a fair and reasonable price for a municipal bond on their behalf," Ron Valinoti, Founder of Triangle Park, who manages MBIS on behalf of its 10 Municipal Brokerage partners, said in an interview.
Bienstock said DIVER Advisor and MBIS decided to partner now because Securities and Exchange Commission fair-pricing rules came out in July, and the Municipal Securities Rulemaking Boards MSRB has proposed rules governing conduct, supervisory requirement and qualification exams for municipal advisors.
He said the DIVER Advisor product had only recently come to market to address the time-of-trade rule that also became effective July 5, and that the DIVER Advisor is being accessed by 32,000 people.
"We thought this partnership would be a huge step in supporting regulators' desire for broader transparency in the market place," he said.
He said that the data provided by the partnership wouldn't initially be for underwriters, but geared more to the buy side or people looking to make sure they are compliant with the fair pricing rules.
Valinoti said that MBIS is pursuing additional distribution partners to help reach individual investors and registered investment advisors.
"We are working with the broker dealer community to help better serve their customers with better information and tools to put information into the hand of those who need it," he said.
