After a study found that a lack of competition made the UK less appealing to international investors, the UK’s Financial Conduct Authority said it would change the market data sector.
The FCA report found, among other things, that the market was dominated by a small number of firms with complicated sales policies. This meant that data users had fewer options and had to pay more. Even though the rules say that delayed data should be given out for free, many users end up having to pay for it.
Along with its report on competition in the market for trade data, the FCA has started a second study that will look into possible competition problems in the markets for benchmarks, credit ratings data, and market data vendor services. This study will try to find out if these problems are causing investors to pay more, make less wise investment decisions, or stop new companies from entering these markets.
The watchdog says it would make rule modifications to address competition concerns and provisionally determine within six months whether to submit one or more of these markets to the Competition and Markets Authority for further inquiry.
Executive Director of Consumers and Competition at the FCA, Sheldon Mills, says:
“Our work aims to make sure that competition is working well in wholesale data markets and market participants can access data they need. This is important to help foster the competition and innovation that will help boost the UK economy and secure better outcomes for investors.”
In 2021, the sale of trade data at UK trading venues brought in more than £200 million. The FCA is working with the Government to make consolidated tapes, which collect wholesale data from across the market and send it out in a single, standardised data feed. This should help improve the overall cost, quality, and accessibility of wholesale data.
