The Financial Conduct Authority (FCA) has begun a review into the use and value of data and advanced analytics in wholesale financial markets, both now and in the future. The FCA is using its Call for Input (CFI) to better understand how data and advanced analytics are being accessed and used, the value offered to market participants and whether they are competitively sold and priced, and determine whether the UK regulator needs to do further work to address any harm that it identifies.
Christopher Woolard, executive director of Strategy and Competition at the FCA, said in a statement: “There is rapid and wide-ranging innovation in data in wholesale markets as firms become better able to gather and analyze data. More efficient, comprehensive and timely data for wholesale market participants have the potential to generate significant benefits. But these changes may also create new risks that may require us to act.”
The CFI considers the use and supply of market data, with a particular focus on trading data and benchmarks. Trading data and benchmarks play a vital role in wholesale financial markets. They are used to trade, make investment decisions, to evaluate positions and to meet regulatory obligations. Trading venues and market data vendors also use them to provide other services, such as consolidated data feeds. The FCA wants to know whether users have concerns with the way trading data, benchmarks and vendor services are priced and sold.