Inside Market Data July 28, 2014 waterstechnology.com/imd Volume 29, Number 40 Nasdaq Targets Q3 for ITCH eSpeed Feed ORGANIZATION & STRATEGY 3 IDC Names GS’ Black Nasdaq OMX is set to release a new market Technology, April 2, 2013). The new ITCH Infrastructure CIO data feed for its eSpeed fixed income plat- feed will also provide full-depth Treasury form on Sept. 30, based on its ITCH data data, compared to Nasdaq’s current API and DATA DISPLAY & ANALYTICS protocol, to provide algorithmic and high- multicast eSpeed feeds, which provide only 5 Money.net Adds ETF, Mutual frequency trading firms with a higher-per- five levels of market depth. Funds Data, Bows Mobile formance alternative for distributing data on The feed will go into live production at Apps US Treasury bonds from the eSpeed market. the end of September in Nasdaq OMX’s Car- The service will deliver real-time data for teret, NJ datacenter, and will be available in a DELIVERY TECHNOLOGIES cash US Treasury-issued securities, includ- beta environment for testing purposes from 6 Exegy Touts Enterprise ing bills, notes, bonds and floating-rate Aug. 4. Nasdaq completed the migration of Migration Package to Dig notes traded on eSpeed, which the exchange the eSpeed platform from the former BGC Out Wombats acquired from interdealer broker BGC Part- datacenter in Rochelle Park, NJ to its Carteret ners for $750 million last year (Sell-Side facility at the end of May, following the >3 ORGANIZATION & STRATEGY 7 NuPont Integrates Aussie Tech Firm for Asia-Pac IT Canadian Market Participants Skeptical of Support Services Proposed Exchange Data Fee Regulation ORGANIZATION & STRATEGY 7 O’Brien Flies BATS Proposed regulations in Canada to curb the Trading Rules (NI 23-101) and mandate that fees that Canadian trading venues can charge all better-priced orders must be executed before CONTENT FOCUS for their real-time market data have received inferior-priced orders, regardless of the market 10 Morningstar Adds 20 mixed reactions from market participants, who on which the order is displayed. Markets to Consolidated are unconvinced that the new proposals will sig- As part of the amendments, which are Feeds nificantly reduce the cost of market data overall. designed to address costs and inefficiencies asso- In May, the Canadian Securities Administra- ciated with the current OPR framework, the tors (CSA), an umbrella organization of Cana- CSA is seeking to reduce the cost of real-time COLUMNS da’s provincial and territorial securities regula- market data in Canada after extensive inter- tors, proposed a number of amendments to views with industry participants determined 4 OPENING CROSS order protection rules (OPR) in Canada, which that: fees are too high; aggregated data costs Strength in Numbers— fall under the National Instrument 23-101 have increased significantly as a result >8 A History Lesson in Surviving The Data Purge Updata Powers Energy Feed with NGX Data 3 HERD UK-based technical analysis software provider mally Nordpool), as well as real-time consoli- 5 SCROLLING NEWS Updata has added futures and index data from dated over-the-counter broker prices from Icap, Canada’s Alberta-based National Gas Exchange Marex Spectron, Griffin Markets and Tullett (NGX) to its Professional analytics worksta- Prebon, and energy news from Dow Jones. tion to provide natural gas and commodities Updata has integrated all natural gas and traders with prices for illiquid instruments on power futures and indexes available on the the North American natural gas and electricity TMX Group-owned NGX exchange into its markets. Energy Feed. The contracts include the NGX The data is available on Updata’s Professional AB-NIT Month Ahead, Same-Day and Day- Energy Feed, which carries other commodi- Ahead indexes, the NGX Union Dawn and ties-related data such as real-time prices from Spectra Huntingdon Day Ahead indexes, as ICE Futures Europe, CME Group’s Nymex well as crude oil instruments such as Western market and Nasdaq OMX Commodities (for- Canadian Select, Cold Lake, Synthetic, >10 FREE attendance for qualified end-users
September 16, London, Victoria Park Plaza
Inside Market Data and Inside Reference Data are delighted to announce our annual flagship event, the European Financial Information Summit, will be taking place on Tuesday, September 16th 2014 at the Victoria Park Plaza hotel in London. Attracting over 400 market and reference data executives, the Summit will address key issues faced by data leaders as they continue to navigate the challenges of the unpredictable financial market.
Reference data Data Analytics Market data Managed Services Regulation Data Governance
Speakers include:
Chris Bannocks, Tony Chau, Founder, Grasp Associated and Executive Director, Former Managing Director, Head Lead Architect, of Master Data Management, IB CTO, UBS BARCLAYS
Colin Hall, Nick Green, Chief Data Officer, Head of Fixed Income CREDIT SUISSE Markets e-Business, CREDIT AGRICOLE
Igor Lobanov, Diarmuid O’Donovan, Enterprise Architect, Chief Data Officer, LEGAL AND GENERAL LEGAL AND GENERAL INVESTMENT MANAGEMENT INVESTMENT MANAGEMENT
For sponsorship opportunities please contact Jo Webb on [email protected] or call +44 (0)207 316 9474
Panel sponsors:
Co-sponsors: Hosted by:
financialinformationsummit.com/eu EXCHANGE WATCH HERD
Nasdaq Targets Q3 for ITCH eSpeed Feed Velocimetrics Nabs TS-A Sales Head Woolhouse <1 acquisition. Moving to the new ITCH was originally developed by 3H[LUJ` TVUP[VYPUN [LJOUVSVN` datacenter cut latencies for eSpeed mar- the Island ECN (which was acquired by WYV]PKLY =LSVJPTL[YPJZ OHZ OPYLK ket data distribution by more than 100 rival Instinet, which in turn was bought MVYTLY ;:(ZZVJPH[LZ ZHSLZ OLHK microseconds, officials say. by Nasdaq) as a lightweight mechanism (KHT >VVSOV\ZL HZ Z[YH[LNPJ Customers using Nasdaq’s ITCH- to transport equities market data at low HJJV\U[ THUHNLY YLZWVUZPISL based datafeeds for equities may also be latency, but Nasdaq has made a number MVY NSVIHS HJJV\U[ KL]LSVWTLU[ able to achieve cost synergies by being of technical changes to adapt the proto- HUK JSPLU[ YLSH[PVUZOPW Z[YH[LN` 0U able to re-use their existing coding col for the fixed income markets, such WHY[PJ\SHY >VVSOV\ZL ^PSS MVJ\Z work, as well as leveraging as the addition of new bond- VU LUOHUJPUN JSPLU[ L_WLYPLUJL HZ network hand-off connec- related data fields. “Equities =LSVJPTL[YPJZPUJVYWVYH[LZ[OL;PW6MM tions at Carteret, says Jeff and fixed income are not same HUK (WWSPJH[PVU ;HW WYVK\J[Z MYVT Kimsey, head of US product kind of market, so we had to <2IHZLK SH[LUJ` TVUP[VYPUN [LJO management for global data make changes. It’s still a sim- UVSVN` WYV]PKLY ;:(ZZVJPH[LZ PU[V products at Nasdaq OMX. plistic feed—that’s beauty of P[Z VMMLYPUN MVSSV^PUN ;:( ILPUN Based on the exchange’s it—and those customers that WSHJLK PU HKTPUPZ[YH[PVU HUK =LSVJP propriety lightweight ITCH are coding to equities can TL[YPJZZLJ\YPUNHUL_JS\ZP]LSPJLUZL protocol, the new feed will Jeff Kimsey leverage what they’ve done [V ZLSS HUK THPU[HPU [OL WYVK\J[ provide further latency sav- already, but they will have to YHUNL>VVSOV\ZL^HZOLHKVMZHSLZ ings to customers, though make changes,” Kimsey says. H[;:(MVYMP]L`LHYZWYPVY[V^OPJO official latency figures are not yet avail- “It’s nothing insurmountable, but there OL^HZZ[YH[LNPJHJJV\U[THUHNLYH[ able, Kimsey says. are certain types of fields and types of UL[^VYR TVUP[VYPUN ]LUKVY ,UKHJL “We don’t have the numbers on information that are important for fixed HUK ZHSLZ THUHNLY H[ ZLJ\YP[` latency yet, but we are opening for income.” WLYMVYTHUJL HUK TVIPSP[` ZLY]PJLZ user acceptance testing in August, so Customers currently subscribing to WYV]PKLY (_PHS :`Z[LTZ ([ =LSVJP customers can actually check it out. We eSpeed data over Nasdaq’s existing mul- TL[YPJZOLYLWVY[Z[VJOPLML_LJ\[P]L already have a number of customers ticast and API feeds will be able to :[L]L*VS^PSS who want the ITCH feed, as it is big- switch to the new feed on Sept. 30, ger, faster and better than the existing but Nasdaq has no current plans to Sunscreen, flip flops, feeds,” he says, adding that firms inter- phase out either product, Kimsey says. Inside ested in subscribing to the new ITCH “Those feeds will continue operate, swimsuit, feed run the spectrum from algorithmic and we won’t turn them down in the Market Data ... trading firms and high-frequency trad- near future…. This is just an additional ers to “anyone looking for [latency] feed,” he adds. Wherever you go on summer improvements.” Faye Kilburn vacation, don’t forget to take IMD with you. Get the latest market data industry news ORGANIZATION & STRATEGY wherever you are on the Inside Market Data IDC Names GS’ Black Infrastructure CIO app. 0U[LYHJ[P]L +H[H OHZ HWWVPU[LK MVYTLY )SHJR QVPULK [OL ]LUKVY MYVT Collins Climbs at Activ .VSKTHU:HJOZL_LJ\[P]L1HTLZ)SHJR .VSKTHU :HJOZ ^OLYL OL ^HZ 4HYRL[ KH[H WYV]PKLY (J[P] -PUHU HZ JOPLM PUMVYTH[PVU VMMPJLY THUHNPUN KPYLJ[VY HUK JPHS OHZ WYVTV[LK )LU *VSSPUZ[V MVY PUMYHZ[Y\J[\YL H UL^S` NSVIHS OLHK VM PUMYHZ[Y\J NSVIHS OLHK VM ZHSLZ PU 3VUKVU JYLH[LK YVSL YLWVY[PUN [V [\YL LUNPULLYPUN HUK KH[H ^OLYL OL JVU[PU\LZ [V YLWVY[ [V JVTWHU`*06(SL_.VVY JLU[LYZ·YLZWVUZPISL MVY -YHUR7PHZLJRPWYLZPKLU[VM(J[P] ([ 0U[LYHJ[P]L +H[H )SHJR [OLIHUR»ZUL[^VYRZVWLY PU 5L^ @VYR *VSSPUZ QVPULK (J[P] PZ YLZWVUZPISL MVY KYP]PUN H[PUN Z`Z[LTZ Z[VYHNL SHZ[ `LHY HZ KPYLJ[VY VM ZHSLZ MVY PUMYHZ[Y\J[\YL PUUV]H[PVU [V Z`Z[LTZ THUHNLTLU[ HUK [OL ,4,( YLNPVU 04+ :LW[ KPMMLYLU[PH[L [OL ]LUKVY»Z THPUMYHTL·WYPVY [V ^OPJO WYPVY[V^OPJOOL^HZZHSLZ WYVK\J[ MLH[\YLZ PUJYLHZPUN OL OLSK [LHT SLHK YVSLZ KPYLJ[VY MVY YLHS[PTL KH[H I\ZPULZZ WSH[MVYT ZJHSHIPSP[` JYLH[PUN James Black PUTHYRL[KH[HLUNPULLYPUN H[ *OPJHNVIHZLK KH[H HUK PU]LZ[ H UL[^VYR Z[YH[LN` LUZ\YPUN VWLYH[PVUZ HUK I\ZPULZZ TLU[ YLZLHYJO WYV]PKLY 4VYUPUN [OH[LUOHUJLTLU[ZILULMP[JSPLU[ZHUK HUHS`ZPZNYV\WZH[.YLLU^PJO5H[^LZ[ Z[HY ^OPJO OL QVPULK HZ WHY[ VM I\PSKPUN H ¸^VYSKJSHZZ¹ PUMYHZ[Y\J[\YL HUK5PRRV,\YVWL [OL]LUKVY»ZHJX\PZP[PVUVM3VUKVU HUK[LHT 4H_)V^PL IHZLK YLHS[PTL MLLKZ WYV]PKLY waterstechnology.com/imd July 28, 2014 3 OPENING CROSS Strength in Numbers—A History Lesson in Surviving The Data Purge
;OPZ^LLRV\Y5L^@VYRVMMPJLOHZILLU ^P[OLYLK ILMVYL ILPUN ZUHWWLK \W I` UL^HUKLZ[HISPZOLK·YPZPUN[VMPSS[OL]VPK NLHYPUN\WMVY7\YNL+H`^OLU^LW\YNL 9L\[LYZH[[OLZ[HY[VM "6UJLUL^Z SLM[I`[OLZOYPURPUNJVTWL[P[PVUZ\JOHZ V\YKLZRZVMWHWLYZHUKP[LTZ[OH[^LUV WV^LYOV\ZL 2UPNO[9PKKLY ^HZ HSZV
Jo Webb, Product Director Incisive Media Tel: +44 (0)20 7316 9474 14th Floor (Unit 1401-3), Devon House, Taikoo Place [email protected] 979 King’s Road Quarry Bay, Hong Kong Tel: +852 3411 4900 © 2014 Incisive Media Investments Limited Unauthorized photocopying or facsimile Subscription Sales distribution of this copyrighted Monazer Rashid Tel: +44 (0)20 7316 9537 newsletter is prohibited. [email protected] All rights reserved. ISSN 1047-2908.
4 July 28, 2014 waterstechnology.com/imd DATA DISPLAY & ANALYTICS HERD
Money.net Adds ETF, Mutual Funds <3 ;LUMVYL :`Z[LTZ HUK WYL]P V\ZS` OLSK ZHSLZ YVSLZ H[ ;OVTZVU Data, Bows Mobile Apps -PUHUJPHS 0UMVYTH .SVIHS 4HYRL[Z HUK )SVVTILYN -VSSV^PUN *VSSPUZ» New York-based low-cost market data each morning, people just want to log in WYVTV[PVU(J[P]PZJ\YYLU[S`SVVRPUN display vendor Money.net has added new once, and find everything in one platform, [VMPSSHZHSLZWVZP[PVUPU3VUKVU[V content to its datasets and has rolled out for ease of use,” he adds. YLWSHJLOPTVMMPJPHSZZH` native mobile apps to accompany its data As part of the new version, the vendor desktop and web-based terminals, and has also rolled out native mobile apps for Going Somewhere? is planning significant analytics enhance- Apple iOS and Android devices, which ments for future releases later this year. can be downloaded from iTunes and the Alert more people to your new Version 3.3 of the Money.net platform, Google Play app stores at no extra cost position faster through Herd. which the vendor rolled out over and above the terminal’s Contact the IMD staff at: two weeks ago, includes new $50 monthly fee. Downey says [email protected], content covering exchange- demand for mobile data access [email protected] traded funds and mutual was coming from all levels of [email protected] funds, collected directly from its client base, from sophisti- exchanges and fund managers, cated funds to mass affluent as well as related fundamental individual investors. HKEx Shuffles Senior Info Execs data to allow users to drill down In September, Money.net /VUN2VUN,_JOHUNLZHUK*SLHYPUN from high-level charts to more Morgan Downey plans to roll out version 4.0 of OHZ UHTLK 9VNLY 3LL OLHK VM detailed information, such as its workstation, featuring new, P[Z UL^ 4HYRL[ 6WLYH[PVUZ NYV\W fund sponsor or the component sophisticated analytics that will ^OPJO JVTWYPZLZ JHZO HUK KLYP]H stocks and holdings of each type of fund. differentiate the vendor from its competi- [P]LZ[YHKPUNHUKTHYRL[KH[H3LL Money.net chief executive Morgan tion. “One of our goals in the first half of ^OV YLWVY[Z [V JVOLHK VM /2,_»Z Downey, who joined the vendor in Feb- this year was to make the product as robust .SVIHS 4HYRL[Z KP]PZPVU 9VTULZO ruary from Bloomberg, where he was as possible. Our goal for the second half is 3HTIH ^HZ WYL]PV\ZS` OLHK VM global head of commodities (IMD, Feb. to create some innovative features that no Z[Y\J[\YLK WYVK\J[Z MP_LK PUJVTL 5, 2014), says the additions stem from one else has, and which will impress even HUK WYPTHY` THYRL[ PUMVYTH[PVU PU a combination of the vendor’s ongoing the big guys,” Downey says. [OLL_JOHUNL»Z3PZ[PUNHUK9LN\SH content expansion plans and “our desire to While he declines to provide specif- [VY` (MMHPYZ KP]PZPVU ;OPZ YVSL OHZ build a complete end-to-end market infor- ics of the new features now, he says the ILLU[HRLUV]LYI`>H`UL>VUN mation platform,” and client demand. main theme of the upcoming release will ZLUPVY ]PJL WYLZPKLU[ PU 3PZ[PUN “We’re seeing a lot more customer be to address the level of “information HUK 9LN\SH[VY` (MMHPYZ /2,_ HSZV activity in non-vanilla equity products…. overload” experienced by financial mar- HUUV\UJLK[OLYLZPNUH[PVUVM)Y`HU Now, when people see a big news story, kets professionals. “The challenge for all *OHU JVOLHK VM LX\P[PLZ MP_LK the first thing they look for is an ETF, market data platforms is that there is too PUJVTL HUK J\YYLUJ` PU [OL .SVIHS rather than a couple of individual com- much noise, so we are working on ways 4HYRL[ZKP]PZPVUMVYMHTPS`YLHZVUZ panies [that would be affected by the to extract signals… not just by using Twit- *OHU ^OV OHZ OLSK ]HYPV\Z WVZP news],” Downey says. In addition, users ter filters, for example—we already have [PVUZ ZPUJL QVPUPUN /2,_ PU want that data available in one place, that—but the next generation of filtering PUJS\KPUN OLHK VM PUMVYTH[PVU ZLY] rather than on separate platforms. “Instead beyond that,” he says. PJLZ ^PSS SLH]L [OL L_JOHUNL VU of logging in to five different applications Max Bowie :LW[
SCROLLING NEWS
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waterstechnology.com/imd July 28, 2014 5 DELIVERY TECHNOLOGIES WALLBOARD Exegy Touts Enterprise Migration September 10: FISD Singapore. Singapore. Organized by FISD.
Package to Dig Out Wombats Details at: fisd.net
St. Louis, Mo.-based hardware ticker tems and proprietary data platforms with September 16: European Financial plant vendor Exegy is positioning its new hardware-accelerated appliances, embed- Enterprise Migration Package as a replace- ded software, and managed services from Information Summit. London. ment for the Wombat Financial Software Exegy. The trading firm, which trades Organized by Incisive Media. Details at: platform following the sale of Wombat multiple asset classes including equities, to New York-based low-latency feed han- options and futures from multiple data- waterstechnology.com/events dler and market data platform vendor SR centers in Chicago and New York, was September 16: FISD Technology Forum. Labs last month by NYSE Technologies, seeking an alternative to Wombat with the data and technology arm of the better after-sales support, Parsons says, New York. Organized by FISD. Hosted IntercontinentalExchange-owned New though he declines to name the firm. by Deutsche Bank. Details at: fisd.net York Stock Exchange. While cost was not a driver for the Chi- The Enterprise Migration Package, cago trading firm, Exegy vice president of September 18: FISD Tokyo. Tokyo. which Exegy launched at the end sales Steve Hughes says that of May, is a package of products other firms could reduce the Organized by FISD. Details at: fisd.net and services designed to migrate costs associated with main- October 10: users to its market data services, taining Wombat software in Buy-Side Technology and includes access to Exegy’s datacenters by replacing it North American Summit. New York. library of over 200 direct and with Exegy’s hardware-based vendor consolidated feed han- services. Organized by Incisive Media. Details at: dlers, redundant appliances with “Typically, what we see waterstechnology.com/events automated failover, as well as is that Wombat software legacy interfaces to the Thomson Scott Parsons requires an immense amount October 14: Frankfurt Financial Reuters Enterprise Platform (for- of hardware at the client site Information Summit. Frankfurt. merly RMDS) and OpenMAMA. to run it. What Exegy is doing is relying Following ICE’s acquisition of NYSE on hardware and using FPGAs, which can Organized by Incisive Media. Details at: Euronext last year and the announcement deliver a 20-to-1 reduction in datacenter waterstechnology.com/events that it would sell off non-core technology footprint,” Hughes says. assets, Wombat customers have faced an In the next two months, Exegy plans to November 7: Buy-Side Technology uncertain future, says Exegy chief informa- release version 3.3 of its hardware-acceler- tion officer Scott Parsons. “What we have ated Ticker Plant and Market Data System Awards. London. Organized by Incisive been hearing from clients and prospects is appliances, as well as its Exegy Client API. Media. Details at: that there has been a lot of uncertainty…. The updated appliances—which will be and now they are faced with a decision available as part of the vendor’s Enterprise waterstechnology.com/events to stay with what they have or go with a Migration Package—will deliver three November 18: newer piece of kit,” Parsons says. “A lot of times as much raw data input capacity as European Trading firms are wrestling with these decisions.” previous incarnations of the products to Architecture Summit. London. In recent weeks, Exegy has signed a enable customers to handle growing vol- deal with a major proprietary trading firm umes of options data. Organized by Incisive Media. Details at: in Chicago to replace its Wombat sys- Faye Kilburn waterstechnology.com/events
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6 July 28, 2014 waterstechnology.com/imd ORGANIZATION & STRATEGY ORGANIZATION & STRATEGY NuPont Integrates Aussie Tech Firm O’Brien Flies BATS for Asia-Pac IT Support Services )(;: .SVIHS 4HYRL[Z SHZ[ ^LLR HUUV\UJLK [OL PTTLKPH[LKLWHY[\YLVMWYLZPKLU[>PSSPHT6»)YPLU Market data and technology product doing… while we wanted to find ^OVQVPULK[OLJVTWHU`PU1HU\HY`MVSSV^PUNP[Z and marketing consultancy NuPont ways to be able to scale our busi- TLYNLY ^P[O +PYLJ[ ,KNL ^OLYL OL ^HZ JOPLM is planning to begin offering technical ness,” which taking on AKCS deliv- L_LJ\[P]L support and development services via ers by providing a recurring revenue 6»)YPLUZWLU[ZP_`LHYZHZ*,6VM+PYLJ[,KNL an operation in Australia to provide model from technical support services V]LYZLLPUN [OL Z[YH[LNPJ HUK VWLYH[PVUHS HMMHPYZ support for consulting clients seeking in addition to one-off consulting fees, VM [OL JVTWHU` WYPVY [V ^OPJO OL ^HZ ZLUPVY to expand into new markets. says Jerry Brunton, senior consultant ]PJLWYLZPKLU[H[5HZKHX64?^OLYLOLYHU[OL NuPont has formed an Australian at NuPont. L_JOHUNL»ZUL^SPZ[PUNZI\ZPULZZHUKTHUHNLK subsidiary and taken on the operations “This is in the early stages, but we P[Z THYRL[ KH[H KPZ[YPI\[PVU I\ZPULZZ IL[^LLU of AKCS, a Sydney-based provider are looking at defining an English- HUK of technology design, development, speaking Asia-Pacific development )(;:*,61VL9H[[LYTHU[HRLZV]LY6»)YPLU»Z management and advisory services to and technical support function—for YLZWVUZPIPSP[PLZHZWYLZPKLU[;OL)(;:L_LJ\[P]L a broad range of industries, including example, for smaller companies based [LHT^PSSUV^HSSYLWVY[KPYLJ[S`[V9H[[LYTHU healthcare, retail, education and tel- in the US or UK that want to sell 0U (WYPS )(;: ^HZ MVYJLK [V JSHYPM` YLTHYRZ ecoms. The company employs about products in Asia,” Brunton says. “We THKL I` 6»)YPLU K\YPUN H SP]L ;= KLIH[L ^P[O 15 staff and is run by Arthur Klioufis, had already been working with some H\[OVY4PJOHLS3L^PZHUK0,?WYLZPKLU[HUKJOPLM who joins NuPont’s management. smaller companies that have tech- L_LJ\[P]L )YHK 2H[Z\`HTH [OH[ JSHPTLK +PYLJ[ Klioufis was introduced to NuPont nology that is applicable to markets ,KNL \ZLK IV[O KPYLJ[ MLLKZ HUK JVUZVSPKH[LK by Chris Lampropoulos, senior con- bigger than they are… and we were MLLKZMYVT[OL:LJ\YP[PLZ0UMVYTH[PVU7YVJLZZVYZ sultant at NuPont who was until doing a lot of product strategy work,” [VVWLYH[LP[ZTHYRL[^OLYLHZP[\ZLKKPYLJ[HUK recently based in Toronto, but has that could benefit from NuPont being :07 MLLKZ MVY YV\[PUN W\YWVZLZ I\[ VUS` \ZLK recently returned to his native Aus- able to offer additional, ongoing serv- :07MLLKZ^P[OPUP[ZTH[JOPUNLUNPUL[OV\NO[OL tralia. “Arthur was looking to expand ices and support, he adds. L_JOHUNL^PSSTV]L[VKPYLJ[MLLKZUL_[`LHY and add value to what he was already Max Bowie -H`L2PSI\YU
waterstechnology.com/imd July 28, 2014 7 ORGANIZATION & STRATEGY Canadian Markets Skeptical of Exchange Data Fee Regulation
<1 of market fragmentation; market amount of market data fees currently “I believe, for the most part, institu- data fees are not subject to sufficient com- charged by marketplaces is reasonable, tional traders would see this as a positive petitive forces to moderate the level of fees the request for comment says. “If all fees move, although they represent a very being charged; and participants are held for market data in Canada are overpriced, small portion of the investment commu- “captive” by the fees charged for data to this method will not provide an unbiased nity,” Brunton says. “The retail sector—or comply with regulatory obligations such measure of the true value of marketplaces’ at least its client base—has been blissfully as best execution. data fees. Rather, it will provide an indi- unaware for the most part that it has only “It is our view that… there is cause cation as to whether any one market is been looking at one market for the last from a fair and efficient capital markets charging relatively more or less than ‘aver- few years, and that 30 to 40 percent of perspective to impose more discipline on age’ for its data.” the volume is traded away from the listing the costs of data…. We are therefore pro- market.” posing an approach that seeks to ensure “Some smaller venues may One positive impact of the regulation, that market data fees charged to profes- feel that the proposals are is that it will establish a link between the sional data subscribers remain fair and unfair, but they have had cost of market data and the value each reasonable,” states the CSA in its notice marketplace provides in terms of trade requesting industry comment on the pro- sufficient time to grow their volume, which will help to address the posed rules by Sept. 19. market share, and haven’t problem of smaller exchanges charging The crux of the new proposal is to really made any headway, so disproportionate fees for their data, says implement a transparent methodology they have relied on market one source at a Canadian exchange. that will enable the CSA to assess the data to keep afloat.” “In Canada you have a situation where relative value of real-time market data cost of market data has been increasing provided by each trading venue to profes- Jerry Brunton, senior consultant, NuPont dramatically over the last 10-plus years as sional subscribers and decide what fees the a consequence of two things. One, every venue should be permitted to charge. For the second approach, the “inter- new marketplace that pops up can define The methodology, which was devel- national reference,” the CSA proposes what its market data fees are; and two, oped by the Ontario Securities Com- to compare the fees charged by Canada’s they can benefit immediately from the mission and applies to both top-of-book markets to those of exchanges around the order protection rule, which says that as Level 1 and full depth-of-book Level 2 globe, to ascertain an average data fee soon as you are a displayed market, people data, involves a three-step calculation. per $100 million traded. “This approach need to take you into consideration from In the first step, the CSA will calcu- assumes that the value of the international a price protection point of view. From late each venue’s relative pre-trade and peers’ data is relatively comparable to that the late 1990s, this has caused the cost post-trade contribution to price discovery of the Canadian exchanges and that the of consolidated market data to rise from and liquidity taking into account metrics value of this data is relative to the value of approximately C$60 or C$70 per user to such as percentage of Best Bid and Offer securities traded on the exchanges,” the C$200 per user,” the source says. (BBO), percentage of spread, marketplace document states. However, some market participants are volume, number of trades and dollar The CSA acknowledges that neither of unconvinced that the proposals will reduce volume. In the second step, the regulator these methods may ultimately be judged the overall cost of market data in Canada, will rank marketplaces on these pre- and appropriate, and that it may instead engage particularly as the CSA does not provide a post-trade metrics. Finally, in the third an industry expert to analyze and deter- cost-benefit analysis in its proposals. step, the regulator will assign an estimated mine an appropriate reference amount. “There is no indication or attempt fee or fee range for market data based on at cost-benefit analysis for underlying these rankings. The proposal will require Reception changes, which we think is strange. Our marketplaces to submit their market data In general, the proposals have been wel- position, which we will be articulating in fees for review and re-approval on an comed by end users as a way to tackle response to [the CSA’s] comments, is that annual basis. the cost of market data in Canada, which there are lots of other ways to impact cost To ascertain the appropriate level of fees has been on the rise for the last 10 years, without driving individual marketplaces for market data that will serve as the basis says the global head of market data at a out of business, and we are disappointed for the calculation, the CSA is proposing Canadian bank. “Canada’s market data that they haven’t been discussed or put two approaches, for which it is soliciting fees are the most expensive in the world, forward for comment,” says a source at an feedback from the industry. and anybody from the paid-client end will alternative trading venue. The first, dubbed the “domestic refer- give you that same response,” he says. For example, it is uncertain how the ence,” takes each marketplace’s revenues Jerry Bruton, senior consultant at data domestic reference methodology will from market data fees and aggregates and technology consultancy NuPont, address the problem of larger venues such them into a single “pool” that is re- agrees that the proposals will be met as the primary market, the TMX Group- distributed based on the rankings. This positively by both professional and non- owned Toronto Stock Exchange (TSX), approach assumes that the aggregate professional data subscribers in Canada. which may have lost market share to other
8 July 28, 2014 waterstechnology.com/imd ORGANIZATION & STRATEGY Canadian Markets Skeptical of Exchange Data Fee Regulation
venues over recent years, but have not However, not everyone is sympathetic than just with a single utility or adminis- correspondingly adjusted their data fees to to the position of Canada’s alternative trator, says Richard Carleton, chief execu- reflect the lesser value of their marketplace. venues. “Some smaller venues may feel tive of the Canadian Securities Exchange. According to estimates published by the that the proposals are unfair, but they “A consolidated service would provide CSA, TMX Group’s share of all traded have had sufficient time to grow their subscribers with access to all of the data volume in Canada has declined from a market share, and haven’t really made from all of the market venues for a single near-monopoly five years ago to around any headway, so they have relied on mar- fee and a single subscription, as opposed 68 percent today, though its market data ket data to keep afloat,” says NuPont’s to the present situation, where each end fees have not decreased to reflect this. Brunton. “You have to remember that user has to make individual administrative, Alternative venues such as Alpha (now competition in data fees has been around billing and customer support arrange- owned by TMX) and Chi-X Canada repre- for a while now, from various venues, ments with each one of the exchanges to sent 15 and 13 percent respectively, while including Alpha Exchange before Maple get a consolidated display,” Carleton adds. the Canada Securities Exchange claims a 2 Group [which bought and merged it According to the CSA’s request for percent share. with TMX]. Alpha, I believe, peaked at proposal, the regulator did consider man- “The CSA has come up with a formula 20 percent market share, and competition dating a cost-recovery data utility akin that defines what you can charge based on did work during the period between 2009 to the US SIP, but rejected the idea the your market share. So, if Chi-X has market and 2012—TMX dropped its Level 1 data in favor of the current option, which has share of around 10 to 12 percent, [the fees a couple of times to C$30.” less of a legislative impact. “In our view, if CSA] says the cost of Chi-X’s market data implemented in full, the data fee proposal should be reduced to align with that 10 to Alternatives will likely achieve some of the benefits of 12 percent, but they are not saying that All Canadian alternative trading ven- these options. While we may consider the TSX—which now represents 70 percent— ues contacted by Inside Market Data feasibility of requiring the creation of a should reduce its market data cost by 30 supported the view that Canada should data utility, this is a longer-term considera- percent. Instead, TSX can carry on charg- instead adopt a model similar to the tion given both the complexity in doing ing what it charges regardless of the fact Securities Information Processor model so and that it would require legislative that its market share has been dropping. used in the US, change and new regulations in many juris- It’s unfair that a market that keeps losing where the CSA dictions. In the meantime, if the industry market share is not impacted in its market mandates a set cost views a data utility as the best mechanism data revenue,” the exchange source says. for all market data to deal with the management of data and In fact, by accepting that current fees in Canada, which is its costs, we encourage the industry to are reasonable—i.e. using the domestic then split between work together and develop a proposal reference model—the CSA is defeating exchanges based for discussion,” the regulator says in its the object of its own aim of reducing on their market request for comment. the cost of market data, says a consultant share. Several ven- Another option to curb market data fees Richard Carleton specializing in the Canadian markets, who ues also confirmed being considering by the CSA is publish- wished to remain anonymous. that they are writ- ing exchanges’ amendments to data fees “For anybody to think that what the ing formal comments to the CSA, but and models for public comment in a simi- TSX charges for market data is reasonable declined to comment for this article. lar manner to the US Securities Exchange and that should be the benchmark for it TMX Group also declined to comment. Commission. The CSA says it is still all, is silly. It just makes no sense at all. At The SIP-style solution would also ease considering this option, but is concerned the end of the day, this really isn’t reduc- the administrative burden on end users, that the comments received will focus on ing a lot of costs when you think about who must currently maintain relationships commercial rather than regulatory issues. it,” the consultant says. with every exchange in Canada, rather Faye Kilburn
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waterstechnology.com/imd July 28, 2014 9 CONTENT FOCUS CONTENT FOCUS Morningstar Adds Updata Powers Energy Feed 20 Markets to with NGX Futures, Index Data Consolidated Feeds <1 Sweet, Light Sweet Blend and Updata customers who are also Condensate. members of NGX will then be able to ;OL YLHS[PTL KP]PZPVU VM KH[H HUK PU]LZ[TLU[ “It’s basically everything NGX cov- pull NGX prices and historical price YLZLHYJO WYV]PKLY 4VYUPUNZ[HY OHZ HKKLK KH[H ers, but the main thing is the Cana- data into the vendor’s suite of techni- MYVT TVYL [OHU UL^ THYRL[WSHJLZ [V P[Z dian power contracts,” says David cal studies, indicators, and oscillators JVUZVSPKH[LKMLLKZPUYLZWVUZL[VJSPLU[KLTHUK Linton, chief executive of Updata. for further analysis. “If you are trad- WHY[PJ\SHYS` MYVT VUSPUL IYVRLYHNLZ HUK ^LHS[O “They’ve got a lot of data, and we’ve ing these contracts, you want the THUHNLYZPU5VY[O(TLYPJHUHUK,\YVWL had end users asking for futures data for price vis- ;OL UL^ JVU[LU[ VU 4VYUPUNZ[HY PUJS\KLZ it. A lot of the demand ibility, and the benchmarks KH[HMYVT*HUHKPHUHS[LYUH[P]L[YHKPUNZ`Z[LTZ is in Calgary, which is for price discovery,” Linton PUJS\KPUN*OP?*HUHKHHUKP[Z*?THYRL[[OL the second trading hub says. 6TLNH HUK 6TLNH 3`U_ (;: 7\YL ;YHKPUN for energy commodities Customers may also use ;4?.YV\W»Z(SWOHHUK;4?:LSLJ[THYRL[ZHZ after Houston. A lot of the data to run correlations ^LSSHZ[OL*HUHKPHU*VUZVSPKH[LK)LZ[)PKHUK people in Calgary rely between NGX instruments 6MMLYMLLK"MP_LKPUJVTLKH[HMYVT5@:,)VUKZ on that data, but really and some of the more HUK YLN\SH[VY -059(»Z ;YHJLMLLK" L_JOHUNLZ PU anyone trading gas in illiquid instruments in the David Linton ,HZ[LYU,\YVWLPUJS\KPUN[OL)\KHWLZ[7YHN\L North America will have North American natural gas HUK >HYZH^ Z[VJR L_JOHUNLZ [OL .,;469,(; waterstechnology.com/imd TOP STORIES ONLINE ... AND MORE 2PTZL`!+L]LSVWPUN4HYRL[Z (>(9+: +YP]PUN+H[H.YV^[O >H[LYZ9HURPUNZ¶(SS[OL DON’T MISS OUT! ^H[LYZ[LJOUVSVN`JVT >PUULYZ Articles from this issue of 0UZPKL 4HYRL[+H[H are published on ^H[LYZ[LJOUVSVN`JVT waterstechnology.com/imd, which ;:(ZZVJPH[LZ,U[LYZ also features exclusive online-only (KTPUPZ[YH[PVU=LSVJPTL[YPJZ 6705065 news and analysis from all the ;HRLZ6]LY07;LJO;LHT WatersTechnology brands: ;OLº/PKKLU;H_»VM0UKL_+H[H 0UZPKL4HYRL[+H[H ^H[LYZ[LJOUVSVN`JVT ^H[LYZ[LJOUVSVN`JVT 0UZPKL9LMLYLUJL+H[H )\`:PKL;LJOUVSVN` (\[PSSH6\[SPULZ+H[H7SHUZ(OLHK >,)*(:; :LSS:PKL;LJOUVSVN` VM4P-0+ 5L^(WWYVHJOLZ[V:V\YJPUN JOIN THE DISCUSSION: ^H[LYZ[LJOUVSVN`JVT 4HUHNPUN*VYWVYH[L(J[PVUZ +H[H Follow us on Twitter @MarketData Like us on Facebook :VSHJL(KKZ[V:HSLZPU<2(ZPH ^H[LYZ[LJOUVSVN`JVT Join us on LinkedIn ^H[LYZ[LJOUVSVN`JVT 10 July 28, 2014 waterstechnology.com/imd 2014/2015 events Hosted by Inside Market Data, Inside Reference Data, Buy-Side Technology, Sell-Side Technology 2014 Events 2015 Events and Waters magazine, the WatersTechnology VHULHVRIHYHQWVDUHWKHOHDGLQJðQDQFLDOGDWD management and technology conferences for September April information and systems professionals working DWðQDQFLDOWUDGLQJðUPVDURXQGWKHZRUOG These conferences deliver expert analysis and commentary through interactive panel discussions, case studies and keynote addresses that provide delegates with the latest on the business, competitive, regulatory October and technological issues affecting market data, reference data and trading technology professionals. May Our series of events provide the opportunity to network with hundreds of leading market data, reference data and trading technology executives from consumers, producers and suppliers across 1RUWK$PHULFD(XURSHDQG$VLD3DFLðF November waterstechnology.com/events June For more details about sponsoring or exhibiting contact: Jo Webb T: +44 (0)20 7316 9474 E: [email protected] To register as a delegate for one of our events contact: December Katie Evans T: +44 (0)207 316 9438 E: [email protected] The new bumper issue Inside Market Data app now available – FREE for all Inside Market Data, WatersTechnology Data and Premium Package subscribers. Download all the content from the latest weekly print issue, build your archive of issues and view them offline. To download and find out more visit waterstechnology.com/static/imd-app