Overbond, a provider of AI analytics and trade automation solutions for fixed income markets, has partnered with market operator TMX Group, to integrate the Canadian Depository for Securities Federal Information Processing Standard (CDS FIPS) settlement-layer for Canadian bond data, into Overbond AI fixed income trading tools and analytics.
CDS FIPS combines executed trade settlement data with custody activity data from both electronic and voice trades (OTC trades) to provide complete daily volume information on Canadian fixed income trades reported to CDS Clearing and Depository Services. The service covers more than 40,000 Canadian corporate and government bonds.
This integration is intended to address data challenges facing Canadian asset managers when they are pricing Canadian bond portfolios, structuring and rebalancing new portfolios, and seeking to construct and use pricing and liquidity time series.
The Overbond-TMX partnership should allow Overbond and CDS FIPS users access to coverage of Canadian fixed income trade data, potentially providing pre-trade and post-trade analytics and more accurate, best-executable pricing and liquidity discovery for Canadian bonds.
Integrating over-the-counter (OTC) trade volumes into Overbond AI models should enhance the precision of bond liquidity scoring and best executable pricing. CDS FIPS data could enable more accurate measurement of the traded volume of Canadian dollar denominated OTC trades — data that is otherwise not found in any other electronic venue data feed or composite pricing data feed.
“Adding settlement layer data to Overbond AI models is the next frontier in data aggregation necessary for discovering best-executable pricing and liquidity in the Canadian corporate bond market," said Vuk Magdelinic, CEO of Overbond.
The CDS FIPS data enhancement is the first new function expected from the Overbond-TMX partnership.
“We expect that TMX and Overbond will enable additional AI-driven data and analytics tools for use by asset managers, buy-side and sell-side traders, analysts, compliance departments and back offices across multiple asset classes,” said Michelle Tran, president of TMX Datalinx.