SIX’s Charles Warburton focuses on why financial institutions need to have confidence in their data sources especially as it helps mitigate operational risk and compliance burdens.
Charles Warburton
(In a wide-ranging discussion, Charles Warburton, head of product and commercial strategy — Americas, local country head — U.S., for SIX, explores the major aspects of SIX’s commitment to data provenance encompassing direct connections to data sources, the roles of corporate actions and reference data, the importance of fixed income and securities master data, and forays into artificial intelligence.)
Q: What does the term data provenance mean, and how does it relate to offerings from SIX?
A: Data provenance refers to understanding and tracking where data originates, how it has been processed, and ensuring its quality and overall reliability. Now, at SIX, data provenance has always been a core strength, particularly in reference data.
We connect directly with data sources (such as stock exchanges, multilateral trading facilities (MTFs,) market makers, and so forth) and put in place integration processes that allow us to track the entire “life cycle” of the data. In 95 years of experience, SIX is consistently focused on data quality and transparency.
In today’s financial landscape, data provenance is as critical as knowing the source of electricity in energy markets. It ensures that financial institutions have confidence in their data sources. It reduces operational risks and regulatory compliance burdens. SIX continues to strengthen its capabilities in this area, ensuring that it remains a one-stop shop for reference data and corporate actions. Commitment to data provenance is to all our products and solutions and is not solely related to reference data or corporate actions in and of themselves.
Q: What roles do corporate actions and reference data play in the data provenance that SIX is developing?
A: Corporate actions and reference data are foundational to data provenance because they provide the necessary structure and identifiers that link securities to issuers, events, and market movements. SIX ensures that the right data comes from the right sources, allowing clients to rely on accurate corporate actions processing and high-quality reference data. Again, our “data ingestion” processes are key to assessing the consistency of the source and the information we gather.
In terms of corporate actions, SIX captures and processes events like dividends, mergers, credit events, and redemptions with rigorous quality controls.
Reference data, on the other hand, acts as the backbone of financial operations, ensuring securities are correctly identified, classified, and linked to the correct entities.
By continuously expanding our coverage, particularly in fixed income and investing in technology, we ensure that clients have access to enriched data that meets their evolving needs. The continued enhancements in these areas demonstrate the commitment of SIX to data integrity and usability and reinforce its leadership and financial data.
Q: Why is it important that SIX offer corporate actions data support, such as credit and redemption events for fixed income instruments?
A: Fixed income instruments are data-intensive and require precise tracking of events such as credit rating changes, redemptions, coupon payments, and so forth. These corporate actions have significant implications for portfolio valuations, risk management, and regulatory reporting.
Our corporate action service ensures that financial institutions receive timely, accurate, and comprehensive data enabling them to manage these events efficiently. Now, by strengthening our fixed income data offerings, we enhance our broader reference data platform. We ensure that clients have seamless access to both structured and unstructured data, and this investment supports risk mitigation, improves compliance workflows, and enhances operational efficiency for clients.
Q: How does advancing SIX’s data and related offerings for fixed income impact other SIX products?
A: Expanding the fixed income coverage from SIX strengthens its entire data ecosystem. The ability to provide enriched fixed income reference data supports multiple other offerings, including corporate actions, risk management solutions, and analytics tools.
By acquiring a majority stake in FactEntry, a prominent provider of fixed income data, in early 2024, SIX has enhanced its coverage of fixed income markets, particularly in structured finance and U.S. municipal bonds. This investment ensured that SIX can provide a holistic view of financial instruments, making it easier for clients to integrate SIX data across different workflows.
Additionally, this expansion helps SIX maintain its position as a trusted data provider for regulatory compliance, ensuring the clients meet obligations related to MiFID II, Basel regulatory iterations, and other evolving frameworks.
Q: So, this sounds like it’s not a siloed initiative.
A: Basically, fixed income supports our whole suite, whether it’s ESG [environmental, social, and governance] funds, ETFs, and so forth. Fixed income propels our whole suite of products. It’s a core play that goes across the full product suite at SIX.
Fixed income doesn’t just beget a “fixed income only product” here at SIX. While we value our newly enhanced core offerings, such as reference data, corporate actions, and our document repository (Doc Hub) with this play, we cannot understate the value of having a holistic fixed income universe across our entire SIX product suite.
We see immediate synergies with evolving our fixed income proposition with some of our key offerings, such as mutual & exchange-traded fund full holdings, green bond data (part of our ESG suite), tax & regulatory solutions, particularly our Sanctioned Securities Monitoring Service.
These offerings rely heavily on high-quality global fixed income data to enhance their value.
Q: Given the variety of offerings SIX provides, could you drill down on which products could serve as the basis for a state-of-the-art securities master?
A: So, a state-of-the-art securities master requires high-quality reference data, comprehensive corporate actions coverage, and seamless integration across asset classes.
Our reference data and corporate actions solutions are well-positioned to serve as the foundation for this. Some of our key strengths would include reference data. We provide deeply structured reference data, ensuring accuracy across all asset classes.
Our key strengths include:
- Corporate actions: A robust corporate actions framework ensures clients stay updated on critical market events;
- DocHub and FactEntry: SIX is expanding its source document integration, ensuring full transparency, and our data is sourced and linked, particularly in fixed income; and
- Fixed income expertise: Our acquisition of FactEntry enhances the ability of SIX to serve fixed income markets globally.
With these capabilities, SIX can offer clients a securities master, for instance, that is accurate, reliable, and scalable, supporting key workflows such as risk management, trading, and regulatory compliance.
Q: What can you tell us about SIX and its collaboration with Bridgewise?
A: Bridgewise is an A.I.-driven research platform that provides buy, sell, and hold recommendations on equities. SIX has entered into a partnership with Bridgewise, integrating it’s A.I.-powered insights into our desktop product SIX iD. Currently, the A.I. tool allows users to query investment insights on covered equities, including financial metrics, earnings, and market recommendations. Beyond this, SIX is now exploring how AI can enhance data quality, validate data, and automate reference data processing.
Q: What are you hearing from your clients about artificial intelligence and how it can impact what you offer?
A: Well, generally, clients are more interested in hearing about how we’re streamlining our processes with A.I. Indeed, A.I. has become a core tool for us to improve analytics, enhance delivery channels and terminals, and provide high-quality data to our clients.
The front-end A.I. tools seem to generate less curiosity and our clients are more interested in SIX ensuring the improvement of its data collection initiatives, data quality initiatives through A.I. We’re looking forward to being able to let clients know how we’re advancing, especially how we collect data, how we ensure data quality, how we improve accuracy, quality, and fill rates across all asset classes as a result of A.I. integration.
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