MTS Considers Direct Feeds

Bond trading platform EuroMTS is considering launching direct feeds in addition to the feeds that it currently delivers via vendors, Inside Market Data has learned.

Rafah Hanna, head of MTS data, says EuroMTS would target institutions with large fixed-income departments and related data such as swaps. He says 11 institutions have already expressed interest. He declines to name them, but says four are US-based and the remainder are European.

EuroMTS currently offers two services via redistributors: MTS Live Market Data, which offers real-time bond market data, and MTS Value Added Data, which consists of MTS Daily Data, MTS Historical Data, EuroMTS Indices and MTS Today.

Hanna says the company hasn't offered direct feeds in the past because of the high cost to the customer of laying down primary and secondary lines to MTS' main hub in Milan.

In addition, EuroMTS would have to create a commercial policy. "The contractual aspect is very straightforward, but also we would be perceived to be in direct competition with our vendor clients. The vendors are critical to EuroMTS because we are a professional user outfit, we are not a retail operation," Hanna says.

In fact, the company previously had a policy to not supply direct feeds to institutions. "The reason for that was that our market data business is a wholesale operation; we supply market data to market data vendors, who then distribute it," he says.

But he says customers have become more persistent in their demands for direct delivery. "They have developed their own internal front-end systems and applications and want to populate those services with MTS data, perhaps amongst other things, so they want a pure feed," he says.

He says customers also believe that direct feeds offer lower latency. And some want to reduce their reliance upon vendors because of cost and technical issues as well as usage rights, Hanna says.

In addition, following the purchase of MTS by Euronext and Borsa Italiana, customers can connect to the trading platform via either exchange, reducing the cost to the customer, he says.

Hanna says EuroMTS is now receiving about two requests a month from firms interested in direct feeds, and it will make a decision by mid-February.