ECB ABS Data Warehouse: Sapient Global Markets chosen

The ECB continues to push forward to create an ABS Data Warehouse.

 The Market Group announced today that Sapient Global Markets beat out five other finalists and will build and operate an ABS data warehouse that will be endorsed by the ECB.

This sets up a very interesting situation.

First, what will the finalists who did not receive the mandate do?

Will they set up their own data warehouse?  At least one of the finalists, say a Loan Performance, who was not chosen has to set up a competing ABS data warehouse.  If they do not do so, when the ABS Data Warehouse expands into the US, it will effectively put them out of business.

Given the ECB is endorsing the Market Group/Sapient Global Markets' ABS Data Warehouse, how will this second ABS data warehouse compete?  Will it secure a patent covering the ABS data warehouse as it applies to US investors?

That sets up an interesting decision for issuers.  Do they go with an ECB endorsed vendor who might violate a patent or does it go with a vendor who controls the patent and collects, standardizes and disseminates the data according to ECB specifications?

Second, what will Sapient Global Markets do?

Will it acquire the intellectual property from your humble blogger and prevent a competitor from emerging?  This makes a lot of sense since controlling the patent also has the potential to improve the profitability of the ABS data warehouse from a revenue perspective - get to charge more because patent blocks competition.

It also makes a lot of sense from the perspective of raising money.  Investors tend to pay a hefty premium for a firm with intellectual property protection.  Conversely, investors tend to shy away from a firm that might have intellectual property problems.

Acquiring the intellectual property also allows Sapient to tap into the subject matter expertise of the firm that developed the intellectual property.