We asked for your input on the changing use and value of data in wholesale financial markets. Here, we set out the work we are doing and provide updates on progress.
March 2023 update
Background to this work
In March 2020, we published a Call for Input (CFI) on accessing and using wholesale data. On 11 January 2022, we published our Feedback Statement (FS22/1) and announced a programme of follow-on work, in particular that we would:
- Conduct an information gathering exercise on trade data focusing on the pricing of trade data, underlying costs, and the terms and conditions surrounding the sale of such trade data.
- Undertake a market study to look at how competition is working between benchmarks.
- Undertake a market study looking at competition in the sale of credit rating data.
Trade data review
We found that trade data users are generally able to access the data they need and this data plays an important role in investment activity in the UK.
However, we also found areas where competition is not working as well as it could. These include:
- Some trading markets are concentrated among a few firms so there is little choice for users not to buy this important data and switching supplier is not an easy option.
- The way data is sold can be complex, making it harder for data users to make informed choices.
- Complexity and limited choice result in additional costs to data users. These are likely to be passed on to UK retail investors and savers.
- Despite rules in place requiring delayed data to be distributed for free, many users end up with little choice but to pay for data.
Our immediate focus will be on:
- Working with Government on developing Consolidated Tapes, which collect market-wide trade data and disseminate it in a single feed. We plan to consult on our proposals for Consolidated Tapes by summer 2023. Depending on any final design and delivery, consolidated tapes could improve the overall cost, quality and accessibility of wholesale data.
- Launching the Wholesale Data Market Study alongside this report. This will allow us to look in more depth at the impact market data vendors have on wholesale data markets and outcomes for data users and end investors.
We are prioritising work in these 2 areas and we will consider the extent to which the issues we have identified in this review are addressed by the outcome of this further work.
Under The Financial Services and Markets Bill, the Government aims to tailor financial services regulation to UK markets. The Financial Services and Markets Bill implements the provisions of the Future Regulatory Framework (FRF) Review, including the transfer of firm-facing legislative powers for financial services previously contained in EU law to the FCA.
This will mean we can make changes to relevant legislation in the future. We will engage with stakeholders about any proposed further actions relating to trade data.
For queries about this work, please contact us at [email protected].