Best Bank Awards: Bloomberg

Since achieving compliance with 19 best practices from international standard-setters for running a financial benchmark in May 2016, data provider Bloomberg has cemented its position further in the space with authorisation in the UK under the European Union Benchmark Regulation.

In October, the UK’s Financial Conduct Authority gave Bloomberg Index Services its blessing as a benchmark administrator, building on its compliance with the voluntary set of principles promoted by the International Organization of Securities Commissions. Becoming compliant means any client located in the EU can continue to use benchmarks, including Bloomberg FX Fixings (Bfix), when the regulation kicks in on January 1, 2020.

Colin Gallagher, global head of foreign exchange data and analytics at Bloomberg, says: “This is a great milestone for us and adds to our story of growth. Clients are using the BFix family of benchmarks covering spot, forward and non-deliverable forward (NDF) rates on a daily basis. Our clients not only like the quality of the data, but its consistency of output as well.”

BFix publishes its spot rate within 15 seconds on the Terminal for dollar-denominated spots and forwards, and within one minute for all cross forwards.

“That’s a tremendous achievement,” says Gallagher, “because we produce 5,000 fixings every 30 minutes in a fully automated fashion.”

He says Bloomberg’s data scientists have developed machine-learning tools that dynamically select the best pricing from its pool of liquidity sources, eliminating spikes and rebalancing composite rates. Its engineering and data teams also guard the integrity of benchmark data.

“We do spend a huge amount of time on algorithms to make sure that no one source can dominate or manipulate a pricing stream,” says Gallagher. “We monitor this around the clock 24/7.”

Clients voted Bloomberg the Best market data provider for FX at the 2019 FX Week Best Bank Awards.

I want to make sure our forwards data is the highest quality and that we’re producing the kind of analytics that our buy-side clients expect

Colin Gallagher, Bloomberg

In addition, engineers at the data giant have developed an FX forwards analytics and pricing engine that exposes intelligence around pricing quarter-ends across G8 currencies.

Gallagher says: “It’s been traditionally quite hard to produce as a standard tenor. But it’s been very popular in assisting firms to price client flow.”

He adds that functionality has been realised to facilitate the market rolling on to a new day in New York at 5pm: “We noticed a lot of our pricing sources don’t always adjust the new day roll for some time. So we built algorithms that detect when the day change has occurred but the pricing hasn’t updated yet, and we automatically roll the composites until we see pricing based on the new day count.”

As a former forwards trader for 20 years, such analytics is a passion for Gallagher. He says: “I want to make sure our forwards data is the highest quality and that we’re producing the kind of analytics that our buy-side clients expect.”

The full list of winners of the 2019 FX Week Best Banks Awards