Interactive Data Launches Best Execution Service for Fixed Income Transactions 

Continuous Fixed Income Evaluated Pricing Powers Execution Quality Measurement for Bond Trades

Interactive Data, a leading, trusted provider of fixed-income evaluated pricing, today announced the launch of its patent-pending Best Execution (Best Ex) service for the fixed income markets. The service provides a trade-by-trade measure of execution quality relative to comparable transactions in the market.

Sporadic trading activity for all but the most liquid bonds in the most liquid asset classes has made it difficult for market participants to assemble the right combination of comparable trades to help them make meaningful comparisons. At the same time, changes in market structure and heightened scrutiny by regulators on best execution have added to the burden of proof on firms.

Interactive Data has developed tools that leverage its continuous fixed income evaluated prices as the basis for the measurement of best execution. The tools can be used in a variety of ways by traders, portfolio managers and compliance officers to more closely monitor trading activities across a growing number of venues and protocols.

“We have devised a way to provide a trade-by-trade measure of execution quality relative to comparable transactions in the market place,” Bill Gartland, Senior Director of Evaluations at Interactive Data. “Using our scoring methodology, clients can see how their trades stack up against comparable transactions across a number of attributes, such as maturity, industry sector and issuer, by using a simple percentile ranking,” he added.

The service can be used to shed light on a range of pre- and post-trade activities and help improve the overall effectiveness of the fixed income trading process at a firm. “Detecting trades that may violate compliance rules prior to execution is just one of the ways these types of solutions help firms to better manage their risk,” noted Anthony Perrotta, Global Head of Research and Consulting at TABB Group. “The regulatory burden confronting firms is Press Release immense, and tools that help automate or lighten the load, as well as assist in improving overall trading performance, are going to be welcomed by the market.”

Andrew Hausman, President of Pricing and Reference Data at Interactive Data said: “Our clients operate under a variety of rules that require them to measure and monitor their trading practices across all asset classes. Launching Best Ex is a big step forward for a sector of the market that has been challenged to meet the expectations of regulators in this area.”

Source: Interactive Data

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