Kilburn's Corner: To Fee or Not to Fee
At $5.35 per user per month, the fee is marginal, but it is a significant story because it is the first time in 60 years that Nikkei will charge fees. In the notification, under a section called “why is the change occurring,” Thomson Reuters stated that “Nikkei will introduce a new pricing policy for Nikkei Indices data effective 1 October 2016.”
Up until now, this has all the hallmarks of a standard market data price increase story, but here’s where things get interesting: A few days later, a representative from Nikkei reached out to me and said that the index provider has no current plans to introduce a new pricing model.
When I went back to Thomson Reuters, the vendor reconfirmed that the fee has been imposed by the index provider. But then, when I went back to Nikkei again, a source was adamant that the price change “is a matter of an information vendor, not ours.” Since then, I have reached out to both Nikkei and Thomson Reuters and have received no further response.
Everyone knows that data licensing is a contentious issue in the market data industry. Most data vendors, exchanges and index providers have their own licensing agreements, terms and pricing models, and—despite the best efforts of industry groups like the FISD—there is no standardization of policies.
Market data departments at financial firms are flooded by notifications informing them of updates. The burden is on them, not only to comply with usage policies, but also to keep up with price changes. So here’s my question: What hope do end users have of keeping up to date with pricing and policy changes if data providers themselves disagree as to who is responsible for introducing them?
And it’s not like any of this is going away. In this week’s issue, our European reporter Joanne Faulkner reports from the FIA International Derivatives Expo in London, where industry participants say that exchanges are becoming more and more like data companies as they seek to diversify their revenue streams.
Speaking at the event, Intercontinental Exchange chief executive Jeffery Sprecher said the exchange’s revenue coming from data rose from 11 percent in 2006 to 41 percent in their most recent results, which he says is a “natural by-product” of exchanges moving away from transactional-dependent revenue streams to a service-based model.
Meanwhile, Alex Kramm, senior equity research analyst at UBS who also spoke at the expo, says, “Everybody in the industry is going to end up paying more [for data].… That’s what I hear when I talk to banks and brokers out there. Not only is everybody coming out with new data products, but they also charge more every year.” In other words, market data is now big business—which means more fees, more fee increases and more notifications.
As a journalist, there is nothing much at stake from resolving the Thomson Reuters vs. Nikkei 2016 Gate—as I’ve chosen to name this saga—apart from getting down to the truth of the matter. But for market data managers, lack of information could have much more serious consequences; audits, fines and reputational damage. And that’s when all this starts to really matter—when it hits the bottom line.
Having given it some thought, I suspect that the reason I am stuck between a rock (Thomson Reuters) and a hard place (Nikkei) is probably just a miscommunication between their respective media departments and commercial teams, but it’s two weeks later, and the mystery remains unsolved.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs
Joseph Lo, head of enterprise platforms at Broadridge, joins the podcast to discuss AI tools.
Man Group CTO eyes ‘significant impact’ for genAI across the fund
Man Group’s Gary Collier discussed the potential merits of and use cases for generative AI across the business at an event in London hosted by Bloomberg.
BNY Mellon deploys Nvidia DGX SuperPOD, identifies hundreds of AI use cases
BNY Mellon says it is the first bank to deploy Nvidia’s AI datacenter infrastructure, as it joins an increasing number of Wall Street firms that are embracing AI technologies.
This Week: Linedata acquires DreamQuark, Tradeweb, Rimes, Genesis, and more
A summary of some of the latest financial technology news.
Systematic tools gain favor in fixed income
Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.
Euronext microwave link aims to cut HFT advantage in Europe
Exchange plans to level playing field between prop firms and banks in cash equities with cutting edge tech.
Why recent failures are a catalyst for DLT’s success
Deutsche Bank’s Mathew Kathayanat and Jie Yi Lee argue that DLT's high-profile failures don't mean the technology is dead. Now that the hype has died down, the path is cleared for more measured decisions about DLT’s applications.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Sell-Side Technology Awards 2024: All the winners