Gaining Exposure to the Credit Derivatives Market Accurate, timely market data is critical to the smooth functioning of financial markets. Recently acquired CMA has made its mark by being the leading provider of pricing information to the over-the-counter credit derivatives market.
To further increase its presence in the over-the-counter (OTC) marketplace, CME Group acquired Credit Market Analysis Limited (CMA), a leading provider of credit derivatives market data, in March. CMA will provide CME Group with greater exposure to the credit derivatives market and the opportunity to leverage clearing, technology and trade execution capabilities to deliver greater value and efficiencies to the marketplace. In looking for a partner to help grow the business, CMA Chief Executive Officer Laurent Paulhac felt it was important to become part of a company that would help CMA increase market liquidity and transparency. The answer was an exchange - like CME Group - that offers strong clearing capabilities and which would not compromise CMA's neutrality.
"By becoming part of CME Group, we are able to maintain our status as an independent provider of credit derivative market data within a company that shares our commitment to improving market transparency and liquidity," says Paulhac. "With CME Group's support, we can further enhance the effectiveness of OTC credit market professionals. This move will take CMA's business to new levels, enabling us to expand our product line and explore opportunities within and beyond the credit derivatives market. Taking the longer view, we will leverage synergies between CMA's products and CME Group's market data and trading-related capabilities to provide greater market transparency and to better serve the market."
CMA is based in London, with a New York office. The company was started in 2001 by a group of credit market participants who saw an opportunity to better organize the flow of information and improve transparency in the credit derivatives market. CMA currently offers two products to OTC credit derivative market participants, primarily focused on asset managers, hedge funds and other buy-side participants. The company's innovative flagship price discovery tool, QuoteVision, provides a clear structured view of live indicative quotes. QuoteVision capitalizes on the e-mail-based quoting model prevalent in the credit default swap market. Traders can receive thousands of e-mails a day containing pricing information. QuoteVision enables them to view, organize and store quotes that they receive in real time, regardless of format. The CMA DataVision end-of-day pricing service, another key product offering, provides objective buy side consensus price verification data, enabling organizations to have a true market view and more accurately evaluate their end-of-day positions.
CMA serves a range of financial institutions, primarily on the buy side. Customers include hedge funds, asset managers, and buy-side desks of global investment banks. QuoteVision users are front office, typically traders and portfolio managers, while DataVision is geared to meet the needs of risk managers, controllers and researchers.
Looking ahead, Paulhac sees opportunities in helping customers to leverage the QuoteVision and DataVision data. "Our goal is to help our clients go as fast as possible from receiving information to making decisions," says Paulhac. A version of QuoteVision for the leveraged loan market, a market in which many CMA customers are active, is in the final stages of beta testing with customers. Also in the works are a number of initiatives relating to analytics, including AlphaVision, a tool that will allow customers to leverage the DataVision information in their trading strategies.
For more information about CMA, please visit the company's Web site at www.cmavision.com.
Back to Spring 2008 Issue Home
Download a full PDF version of this issue here.
