Achieving Market Data Integrity: A Critical Mission

September 25, 2002

Abstract

Boston, MA, USA September 25, 2002

Celent Communications finds that while ensuring equity data integrity is a relatively expensive undertaking--costing over a million dollars for equity index data feeds overall--it is an extremely rewarding one, generating over five million dollars in annual revenues and loss reductions.

Given global trading volumes, complexities, and market vicissitudes, market data integrity is no longer merely nice to have—it is a "must-have." In a new report, entitled , Celent examines the rising status of equity market data integrity and its implications. The report summarizes interviews with market data experts, institutional traders, and leading money managers.

Errors and Omissions Occur Daily -- Equity Index Data Feeds

According to Alenka Grealish, senior analyst at Celent, "Despite technological advances, insufficient data-scrubbing by the sources, compounded by the continuing need to manually enter certain data (e.g., corporate actions), mean that errors and omissions continue to occur on a daily basis across both developed and emerging markets." Sang Lee, senior analyst and co-author adds, "As institutional traders’ quest to beat the market and ferret out market inefficiencies becomes more challenging, the role of equity data integrity in their trading strategies and model building has become paramount."

A is available online. On October 30, 2002, Celent Communications and Iverson Financial Systems will co-host a Webinar discussing the report's findings.

of Celent Communications' Institutional Securities & Investments research service can download the report electronically by clicking on the icon to the left.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA September 25, 2002

Achieving Market Data Integrity:  A Critical Mission

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 5
MARKET OVERVIEW 6
  Worldwide Growth in Trading & Indexing 6
  Securities Firms Face Tightening Margins 8
  Money Managers: Managing Indexing and ETF Demands 10
  STP: Strong Force to Improve Market Data Integrity and Management 11
EQUITY DATA INTEGRITY: THE VALUE CHAIN 12
  Equity Data Pitfalls and Shortcomings 12
  The Value Chain: From Data Gathering & Cleaning to End-User Applications 13
AN OVERVIEW OF THIRD-PARTY PROVIDERS 16
IVERSON FINANCIAL SYSTEMS 19
  Background 19
  Global Index Monitor 20
GAUGING BENEFITS AND COSTS 24
  The Benefits 24
  FTE Costs: Build vs. Outsource 26
  Tallying the Benefits 27
CONCLUSIONS 29

 

        

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