Vendor Services
Vendor Management
The MDMS Vendor Management service enhances our client's ability to control cost, manage risk, maintain a professional relationship and ensure dependable delivery of service. Our interaction with many of the vendors in the market data space allow us to not be tied to any one vendor management tool. It is our experience that adds value to our clients, not the technology.
- Negotiation of new and renewed contracts
- Assist in implementing a risk assessment and workflow system
- Provide alternative vendors where cost or performance becomes an issue
Vendor management
The Vendor Management process can be a complex, time consuming, and daunting task especially if it is not your primary business responsibility.
MDMS will understand your requirements, manage the process and then align the right vendors for your business.
MDMS Vendor Management Strategy
- Create a comprehensive list of vendors and contracts pertaining to market data
- Document contract terms in a central location
- MDMS has a central inventory database which includes vendor reporting
- Create a workflow to update contract inventory
- Create a centralized procurement and approval process to avoid unauthorized or unnecessary vendor contracts
- Manage or assist in the creation of vendor risk assessment process
- Reviews current business need of each vendor contract scheduled for renewal with a focus on cost savings
- Research alternative products to potentially replace the current vendor
- Research vendors to support new business initiatives
- Gather business requirements
- Interview vendors
- Set up initial business meet
- Manage the trial period
- Negotiate contract terms with a focus on cost savings
- Review vendor invoices to ensure client is billed correctly
CONTRACT INVENTORY MANAGEMENT
Creation of a database to provide visibility into the cost and key terms and conditions is critical to any client who purchases large amounts of market data. If this does not exist at your firm, MDMS will partner with Accounting, Legal and the vendors themselves to centralize all key contract data into a searchable database. Already have a tool? MDMS can manage the data content going forward.
- Perform invoice reconciliation matching each invoice to a specific contract
- Execute contract review process with business based on documented renewal dates
- Create management reports to analyze market data spend by Vendor, Category, Department and User
Do you need assistance centralizing your market data contracts?
We have expert knowledge of many vendors’ contracts. Our ability to document these contracts has proven to be helpful in educating managing as well as preventing autorenewal terms from kicking in without approvals.
We can track and review your existing agreements that are coming up for renewal and recommend changes, negotiate new agreements on your behalf, and assist in mergers and acquisitions that may affect your firm.
Sample Engagement
- Agreement consolidation across different business units and subsidiaries
- Capture and aggregation of contracts from 500 + / - market data vendors and exchanges
- Centralization of the global contract administration function
- Contract negotiations with vendors based on client-directed guidelines
- Contract Re-negotiation
- Contract review and analysis of all existing agreements to ensure compliance with contract terms and other vendor's requirements
- Designed and implemented contracts database administrations systems maintenance
- Developed "tickler system" for contract expiration and notification dates
- Established standard templates for user profiles and contracts
- Identified key terms and conditions, ie., use of data, unit of count, pricing, derived data definitions, etc. for contracts
- Initial database population for inventory and contracts
Cost Reduction
Market Data is typically a top 5 spend at any firm. MDMS provides a service to review your use of data, current contract terms and alternative vendors all designed to reduce costs. We typically save our clients 20% or greater within the first 12 to 18 months of the engagement. Smaller 3 month assessment packages are also available.
- Rationalization, validate the need for all of the data currently under contract
- Optimization, determine if you are using your existing data in the most efficient manner
- Through Client/Vendor Experience, MDMS can implement proven cost saving strategies.
Cost Reduction
The MDMS Approach
We will take a phased approach at performing an evaluation of the market data spending at your firm. We will make recommendations as to where specific savings can be achieved.
Our implementation model includes the requirement of having one key liaison contact at your firm for the purposes of resolving questions quickly so as to not impact the overall timeliness of completing the evaluation.
Phase I – Information Gathering – We will gather data, through interviews of key personnel, or by requesting the information from a firm liaison, in order to capture the following data points:
Phase II – Analysis of Data – We will use our experience to analyze the data that is collected and compare that to standards and norms that we have identified at other financial services firms. We will identify redundancies, gaps, and other anomalies, especially for non-real time data. We will identify other targeted opportunities for cost savings. If permission is given by your firm’s management, we would also like to interview business users, support personnel, developers, and finance professionals, as needed, in order to validate our analysis.
Phase III – Development of Recommendations – We will construct a final report that summarizes our effort which includes the data that we have gathered, our analysis, and a list of our recommendations with estimated savings that can be achieved through their implementation. The following list of items will be addressed during this phase of the project:
Exchange Services
Exchange Management
Exchange Management includes taking ownership of the Vendor of Record (VOR) responsibilities that come with the use of exchange data. Our service covers all interactions between your firm and the Exchange. We manage the burden of policy compliance and the exchange relationship.
- Manage Relationships with Exchanges including Document and Declaration filings
- Policy Review and Interpretation
- Data Access and Reporting including database enhancement
Exchange Management
Exchange management has become a discipline. Staying in step with changing policy from providers is a team task which is often thrusted on to one or two market data members, sometimes as one of many other responsibilities. This is not a winning formula, We have seen missed announcements, differing interpretation of policy and sometimes a lack of understanding of the risk and implications of changes.
MDMS has dedicated staff who are focused on reviewing and communicating policy changes to our client’s stakeholders. We interact with exchanges on a weekly basis since we are representing our clients in many capacities and have ample opportunities to understand, clarify and communicate policy to your teams.
Our Exchange Management offering focuses on the execution of Vendor of Record responsibilities on behalf of our clients.
When you allow us to do your exchange management we will provide you with -
Exchange Reporting - We will partner with your IT and business owners to correctly aggregate entitlement data and report to the exchanges in accordance with your vendor agreements.
Policy Monitoring – During implementation and through the course of day to day support we inventory the data your firm has and monitor policy changes which can affect your business. We have standardized formats for communication and depending on other services we do for you can also perform impact assessments. As policy changes or is introduced we will communicate it to your stakeholders in a timely and clear manner.
Policy Interpretation – We can help stakeholders gain an understanding of what policy means and their nuances. Since we represent many clients we are also able to ask questions to providers without disclosing who the client is, this is helpful when you need to clarify policy against what you are doing without drawing unneeded attention to your firm. In servicing, other clients if we see that shifting interpretation can affect your firm. We will communicate it as we do with policy monitoring.
Contract Administration – There are annual commitments that firms have to perform, exhibit As etc. On your behalf, we will make sure that your firm is current with contracts and schedules required by exchanges. We work with your internal teams to complete these tasks.
Audit Defense – It’s not if you will be audited, it’s when; when that time comes, you can rely on our experience and expertise in representing or assisting during an audit. We can gather benchmarks from other clients and provide insights into an exchange’s dispositions.
Sample Engagement
In short, we take away the burden of managing market data, become your trusted advisor and allow you to spend your time focusing on your business,
- Submitting Monthly Exchange Reporting
- Filing Required Exchange Documents to Acquire Market Data
- Managing Market Data Access/entitlements
- Managing Exchange Relationships
- Managing Risk and Limiting Exposure
- Maintaining Compliance With All Exchange Agreements
- Managing the Entire Exchange Audit Process
Nonprofessional Subscriber Verification
Companies redistributing exchange data to retail or nonprofessional subscribers have an obligation to ensure these subscribers qualify as nonprofessionals. The MDMS service uses a combination of automated and manual reviews to fulfill this requirement.
- Comprehensive Review Process
- Detailed Results Including Support for Each Classification (Pro, Non-Pro or Unknown)
- Understanding of Nonprofessional Policy from Each Exchange
Pro Non-Pro Subscriber Verification
MDMS provides a full service offering using proprietary software, data sources, experience, and knowledge to verify whether subscribers are professionals or non-professionals. We then implement strategies and make recommendations to eliminate errors to minimize exchange costs.
Each of these steps have specific project plans and deserve their own time right now let’s talk about the implementation, or what we are going to provide you.
Best Practice Implementation – We are constantly working with our clients and industry stakeholders to identify the most effective way to validate and communicate with subscribers concerning their non-pro status. When we see something working or not we are quick to implement it across all our clients. We have seen there are a lot of people and departments involved but are not always aware of their responsibilities. Or, there are inadequate processes in place for them to work together. Our best processes implementation will help you align all your stakeholders.
Automated Subscriber Verification – At the center of our service is best in breed software which can efficiently augment our process with AI and machine learning. We can process your subscriber lists at speeds and accuracy far greater than a human, or a room full of humans can. We access 10+ databases and employ cutting edge technology.
Yearly Recertification – Exchanges have required this, they did not enforce it, they are starting to. Since we are using software we can recertify your subscribers we recommend annually. We have seen this result in cost savings in some cases. Since our software can process at several hundred subscribers per hour and it does not sleep or take off weekends we can perform an annual recertification keeping the data fresh.
Risk Monitoring – We can work with your internal teams, Legal, market data technology etc. to make sure that risk is under control. New features, data and policy can lead to new risk forming, but we position ourselves to make sure you keep it in check.
Policy Interpretation – Speaking of policy, we converse with the exchanges a few times a month besides the scheduled quarterly meetings where we specifically discuss pro – non-pro state of affairs. We stay on top of changes and the pipeline to make sure your internal stakeholders are aware of actions needed to be taken. .
Audit Defense – Look it’s not if, it’s when. When, when happens we are there with our playbook to guide you through the audit process and can even represent you if needed. All the classification data is stored in the software and we have access to artifacts needed to support classifications you will be reporting on.
Sample Engagement
We have a three-step process where we come in and do an assessment, develop a recommendation and implement the service. There are little nuances which make each firm a little different. We like to learn about your processes and people, recommend where changes might have positive impacts and then embed our service into your workflow.
Our process is as follows:
- Client Sends MDMS a Subscriber File on Daily, Weekly or Monthly Basis
- MDMS Loads File Into Our Subscriber Verification Software
- The System Categorizes the Subscribers Into 3 Categories -
- First Category Is Professional
- Second Category in Non-professional
- Third Category Is a Grey List
- MDMS Then Analyzes the Grey List to Understand Why a Specific Classification Could Not Be Made
- Due to Missing Information
- Due to an Issue With an Email Address
- Due to an Issue With a Physical Mailing Address
- Due to Employer or Occupation Issues
- MDMS Researches Grey List to Make a Final Determination
- MDMS Provides Post Processing File Back to Client With Recommendations on Next Steps to Address Pros and Remaining Grey List
- The Client Can Then Contact the Subscriber and Implement the Recommendations
- MDMS Will Annually Re-certify Every Subscriber
Market Data Compliance
Exchange and vendor audits are inconvenient, inevitable, and expensive. You can rely on our expertise to reduce your fee liabilities and get you into compliance. We have 20 years experience interpreting exchange policy that adds a level of protection to our clients during and after an audit.
- Assist Clients in Understanding and Maintaining Compliance Pre and Post Audit
- Leadership in Preparation, On-Site or Remote Meetings and Negotiating Results
- Perform Required Quote Meter, Indirect Billing and MISU Audits
MDMS Specializes in Exchange Compliance Audits
- Reputation: MDMS has managed audits with all the major exchanges both domestic and international. Our interaction with the audit teams have allowed MDMS to develop a reputation of respect and professionalism within the industry. Our clients benefit from this reputation during the audit.
- Preparation: Our experience managing the audit process for multiple clients allows MDMS to gain insight into what the exchange is looking for and how they want to see the supporting documentation.
- Negotiation: MDMS has done a very successful job in reducing fee liability by crafting fair and reasonable agreements with the exchanges.
- Time: Our relationships allow you, the client, to focus on your business while we focus on managing the process and reducing potential fee liability
- Results: We average a 75% reduction in fee liability from the original exchange proposal. We also leave the client with a better professional relationship with the exchange which benefits future negotiations.
MDMS is Approved for Exchange Required Audits
- NYSE Quote Meter Audits
- New Quote Meter Vendors: An audit/review must be performed within the first 90 days of service by an external audit firm acceptable to the NYSE. The next audit will be due the following calendar year and every 2 years after that. Existing Quote Meter Vendors: You are required to perform an audit/review every 2 years. This audit is due on the 31th of December.
- NYSE Indirect Audits
- NYSE requires that an audit be conducted within six months of Vendor’s eligibility for indirect bill model by a firm approved by the NYSE. Thereafter, an annual audit is required and must be submitted by December 31st of each year.
- Hong Kong Meter Audit
- HKEX-IS licensed real-time information vendors (IVs) and end-users (EUs) who provide or use real-time Usage Based Services (including Per Quote Access and/or Charge Per Unit Time services) to submit a 3rd party certified Quote Meter Audit Report within 90 days upon the initial financial year-end during which its real-time Usage Based Service launched and within 60 days upon financial year-end on an annual basis thereafter.
- MISU Audits
- NYSE requires that an audit be conducted within the first ninety (90) days of the first issuance of MISU credits. The initial audit should examine the first month of MISU credits requested. Thereafter, an annual audit is required and must be submitted by December 31st of each year. The audit should cover review of any consecutive four (4) month period. NYSE reserves the right to request an audit at any time.