What is the challenge?
When dealing directly with clients or other firms, the responsibility for publishing a quote falls potentially to the liquidity provider; but when it comes to publishing the details of the trade itself, the responsibility is with one of the counterparties.
Visibility of other dealers’ quotes and trades will help with price discovery, and traders and sales desks will need to build strategies for using this data to price products, based on visible market activity and how the competition will react to their firms’ own visible quotes.
Quotes can remain private in certain instances, depending on the quote size. It adds a new strategic dimension to both buy- and sell-side as you decide when to select quote sizes above and below transparency size thresholds. Managing requests for quote (RFQ) and responses, balancing size, timeliness of execution, choice of participants in the process, and risk of market impact will be new competitive weapons.
In order to successfully navigate this new environment, sales desks and traders will need to have access to the broadest and most up-to-date real-time market data. This needs to be available on both the desktop and within their firms’ pricing tools for streamed-pricing, quoting and price benchmarking tools.
What is Thomson Reuters doing to help?
At Thomson Reuters, we are committed to bringing transparency to the market through pre- and post-trade data sourced from systematic internalisers (SIs), approved publication arrangements (APAs) and trading venues.
A low-latency consolidated global data feed that delivers full tick, depth-of-market data, helping customers to source better quality information and minimize the total cost of ownership of their real time infrastructures.
As with our MiFID I service, our instrument reference data will be mirrored on the real-time feeds and Eikon desktops, in line with client consumption needs.
Provides access to key MiFID II-related instrument data, allowing the sales and trading desks to make fully informed pricing decisions. This includes MiFID II liquidity status and the various threshold size limits that determine the transparency obligations of each individual quote provided.