Thomson Reuters wants market data reform

   

Source : http://www.efinancialnews.com/tradingandtechnology/regulation/content/1056307657

 

 

Luke Jeffs
19 Jan 2010

  

 

Data giant Thomson Reuters has detailed a set of proposals aimed at giving traders a clearer and cheaper view of share pricing across Europe’s stock markets, where trading has become increasingly fragmented since the introduction of Mifid over two years ago.

The data vendor polled 20 buyside firms on the ease of accessing pricing data following the November 2007 introduction of Mifid and found the competition and fragmentation enabled by the  European Commission act  has made this more difficult.

Thomson Reuters has responded by publishing a white paper that details a range of changes that, it has argued, will tackle some of the problems that have arisen and make the European equities market more transparent.

The paper has 14 recommendations that cover a range of issues from market practice and regulatory reforms, to the methods that European trading and reporting venues use to standardise, distribute and charge for the data they generate.

Among the most controversial proposals in the white paper, which Thomson Reuters said it has sent to European regulators including the Financial Services Authority, is the idea that regulators should force exchanges and other trade reporting venues to cut the fees they charge clients for the data.

Some of Europe’s largest exchanges, trading platforms and trade reporting services derive a substantial proportion of their revenues from data feeds so the adoption of the Thomson Reuters plan by European regulators could have grave implications for these firms.

Asset managers, and data vendors including Thomson Reuters, have been keen in the past two years to promote the idea of a mandated consolidated tape but the exchanges have argued the market should be allowed to find its own answers.

A consolidated tape would pull together the data feeds supplied by the many European trading platforms, effectively providing investors with a single view of the entire European equity market.

Thomson Reuters wrote: “To promote transparency, Mifid II should ensure that execution and trade publication venues make available their market data for inclusion in a real-time consolidated tape at a much lower price than is currently the case, ideally at marginal cost.”