One of the key unique premium features of Bloomberg, its universe of proprietary ID codes for securities in the stock, bond, options and other financial verticals, is going freeware. The entire data set can be now used by anybody at the following website: http://bsym.bloomberg.com. While unique pricing data will not be available (at least not yet, but give it a few weeks before some enterprising entrepreneur plugs this into some free pricing data feed), and even though CDS data still seems to be missing, this is a curious step by Bloomberg which heretofore has guarded its security universe dataset with religious zeal.
The site allows users to look up descriptive information on an issuer or industry sector, and will provide information including feed sources and unqiue Bloomberg unique ID codes.
Yet reading between the lines of this action indicates it is not the act of altruism it may initially seem to be. As Securities Industry News points out:
“Bloomberg’s free access to ID codes could give it a competitive edge over other data vendors and make it an industry standard,” says Ed Ventura, president of Ventura Management Associates, a Princeton, N.J. consultancy specializing in data management issues. Thomson Reuters, for one, does charge for the use and distribution of its proprietary Reuters Identification Codes (RICs) through licensing fees to their data feeds.
On its bsym.bloomberg.com website Bloomberg touted the merits of its free strategy over those of its competitors. “Other organizations assert proprietary rights over their identifiers, impose significant limitations on their use and either charge users license fees or include their symbology licenses with the purchase of related products,” said Bloomberg. By contrast, Bloomberg “users would be able to use the identifiers for a variety of uses including trading, research, and mapping.” Bloomberg went on to say that an effective symbology for any class of instrument must have broad coverage, be widely available at a low cost, flexible enough for use in multiple functions, allow mapping to alternative symbologies used in related functions, and be dynamic enough to immediately account for the many instruments that arise, expire, and change on a daily basis,” wrote Bloomberg on the bsym.bloomberg website. “Bloomberg believes that its BSYM will satisfy all of these requirements.”
As the investing world moves away from increasingly illiquid equities and to the liquidity provided by bonds and credit derivatives, S&P's CUSIP methodology (at least in the realm of cash bonds) has reigned supreme. What Bloomberg is attempting to do is to muscle in on and expand the lucrative securities identification business. Which, with at least 4 different securities tracking services out there, is not a bad idea, although it is likely just a matter of time before it is reverse engineered and streamed as free data. Hopefully the future re-repeat Mayor has done his math well on this one.