Banks, brokers support regulatory focus on market data fees - Acuiti

Banks and brokers support recent moves by regulators to tackle high market data fees, according to a new report.

The quarterly Sell-Side Execution Management Insight Report by market intelligence firm Acuiti found that all respondents said market data fees are too high while 47% of those asked think market data fees are “far too high”.

The report suggests executives at banks and brokers find it hard to forecast market data costs while respondents to the survey also cited market data costs as a reason for them not entering new markets.

Some 58% of bank and broker executives polled support the increased regulatory oversight of market data firms and the prospect of mandatory limits on the mark-up of data fees.

Another takeaway from the report, produced in partnership with Horizon Software, was the simplification and standardisation of market data licenses and contracts.

Sylvain Thieullent, CEO of Horizon Software, said: "The findings of the Acuiti Sell-Side Execution Management Insight Report highlight the increasing challenges facing sell-side firms in managing market data costs and improving automation and optimisation.”

The market data commentary was part of the broader study by Acuiti into the prevailing attitudes among sell-side trading desks.

The latest report suggests the development of algorithms and increased use of artificial intelligence are two key areas of focus for sell-side execution managers.

Ross Lancaster, head of Research at Acuiti, said: “Members of the Acuiti Sell-Side Execution Expert Network are seeking cost-effective ways of increasing optimisation and automation without the risk, cost and complexity of a large scale overhaul of their technology infrastructure.”

The UK Financial Conduct Authority launched last week a study of the wholesale market data industry including benchmarks, ratings and vendor services after raising concerns about costs to users.

The British regulator opened the market data consultation on Thursday last week as the FCA presented the results of its separate trade data research, covering pre and post-trade data provided by trading venues.

“Our work aims to make sure that competition is working well in wholesale data markets and market participants can access data they need,” Sheldon Mills, executive director for consumers and competition at the FCA, said in a release.

Mills added: “This is important to help foster the competition and innovation that will help boost the UK economy and secure better outcomes for investors. We will use the findings from our wholesale data work and findings from our market study to guide us in our efforts to achieve these aims.”