The rating agency, through its electronic data services group, will offer the newservice in order to help broker-dealers adhere to regulatory requirements that next yearwill mandate submission of municipal trades within 15 minutes of execution.
In an interview yesterday, Maryrose Carosia, director of information services atStandard & Poor's, said the service will offer intra-day updates as part of theindustry's Real Time Trade Match, or RTTM, initiative. The updates include terms andconditions of any security required for trading, clearing, and settlement, she said.
The product is an upgrade to the agency's existing KennyBase Database Service, whichStandard & Poor's has been offering to clients. This service provides security masterinformation, which includes structure, coupon, ratings, Cusip numbers, and informationon credit enhancement providers on deals. Currently, the information is offered at theend of each business day.
It will offer the complementary service to its existing client base and other brokerdealers, funds, and banks in real-time mode as changes are made to the database. Thechanges could be from issuers, or material events such as a default or the exercise of acall option. It is expected to be available in mid-2004, concurrent with the time thatregulatory requirements are scheduled to go into effect.
Frank Ciccotto, a managing director of Standard & Poor's, said in a prepared statementthat the agency "firmly supports the RTTM needs of its customers. The industry's movetoward straight through processing (STP) and the minimization of settlement periods fromT+3 to T+0 warrants the expansion of municipal securities reference data delivery. Thedealer community has demonstrated its need for timely reporting and we are proud tosupport our customers by providing the tools to facilitate informed decision making."
The move toward RTTM is the result of a collaborative effort by industry leaders andgoverning bodies, the agency said in the statement. By meeting real-time traderequirements, customers will dramatically reduce risks inherent to trade data reporting,as RTTM minimizes the gap between the execution and submission of a trade. Thissignificantly lessens intra-day market and operational risks, as traders will receiveimmediate trade status notification. Real-time reporting facilitates rapid errordetection and resolution, the release said. These key benefits enable investors to makestrategic buy-sell decisions and improve sector analysis.
Standard & Poor's utilizes KennyBase to provide information on municipal and corporatefixed-income nationwide.
I-deal Parity, of which Thomson Financial is a partner, currently offers a DalcompPrimary trading system that feeds back information on trades to a firm's internal back-office system. That information may include time of trade, pricing yield, coupon, andCusip number.
Bloomberg LP currently offers services with similar capabilities through BloombergProfessional Service.
