Reminder: The Biggest Blockade

Just a reminder, the highest dollar value information blockade to exist in the Google era is the blockade on Financial Instrument Holder information. Who owns what? Or at least how can I send them a message?

Global securities outstanding total somewhere between $200 to $250 trillion, or something like 2x global GDP. Derivative notionals are much higher at roughly $700 trillion, but let us ignore that for the moment and just focus on securities.

Ostensibly, security holding information can be found in the bowels of DTC. But only certain parties have standing to use DTC, and only in very limited ways. For example, investors can not reach out to find other investors.

Some Holding information is disclosed publicly due to regulatory requirements for certain investors like Mutual Funds or 13-F filers. But this filing information is just the tip of the iceberg.

In fact, for securities that have high dollar value control, liquidity, and transparency issues (like structured credit and mbs), typically less than 5% of holders can be found through public filings. These less liquid fixed income sectors constitute roughly $20 trillion in face value.

There are no good policy reasons that investors, on a mutual opt-in basis, should not be able to locate and communicate with each other directly with respect to certain issues. Making this possible in a format that works for investors, taking account of their fiduciary and disclosure issues, is what DealVector is all about.