Client Success Story: Market and Reference Data Compliance - How compliant is your market data use?
Why do exchanges and vendors do audits? 🕵️
Compliance with the terms & conditions of stock exchanges, market data vendors and third party data providers.
Understanding the rationale and reasoning
Traditional stock exchanges are increasingly conducting audits, because they:
👉 Want to address the fact that new ways of (automated) trading are making use of the exchanges’ data that hadn’t been anticipated
👉 Are under pressure from new trading venues such MTF’s (Multilateral Trading Facilities) and want to protect their own franchise
👉 Want to address unlawful, piracy-like use of their data
Vendors are increasingly conducting audits, because they:
👉 See a shift away from their terminals to low-cost market data display providers, to internal display applications, and to non display applications
👉 Want to/need to grow revenues, even in difficult times
👉 Want to be in a bargaining position with the client, to tie them in for the following years (or hit them with a substantial audit claim)
Third party providers (such as broker/dealers and benchmark index providers):
👉 Want to push for wider brand recognition and capitalization
👉 Wish to protect sometimes decades’ worth of proprietary research and analysis
👉 Need to get a (better) return on many years of investment in technology and infrastructure