Date: Thursday, November 2, 2017
Conversations with European exchanges over the last few months have mostly centred on one thing: MIFID II. A great tsunami of policy updates is expected as exchanges ensure compliance with this latest directive with respect to their market data. So, what does that mean for the market data user community? Well, as well as lots of questions from the people who pay the bills, keeping up with all the policy changes could become a full-time job, and we need to make sure that users don’t suddenly lose data they need for their jobs when the changes come into effect next January. What you will need to know For each of these policies we will need to ask the following questions: What is completely new? Which changes could affect my current users? How much more is this going to cost me? What are the new rules for reporting unbundled data? Do I have to change the way I permission my users? What will the vendors do? Replicate the change, ignore them and carry on as normal? Find the answers in PEAR Fortunately, Axon is carrying out the same analysis and working with the exchanges to map the changes in PEAR, so you can ask us once we have added them, and you will be able to inform the people who pay the bills exactly what the changes will be, and how much extra (or less) market data usage will cost your firm. As with all policy changes, we will also be highlighting details of the changes for each policy, and you will be able to compare current and announced policies for any changes. You will also be able to run ‘what if’ scenarios to determine if there are cost-savings to be made based on changes to the data charges. All that will be left for you to do is work out which applications are affected by the data changes. However, this can be a lengthy process which entails going through all your DACS reports and recertification emails to see which apps have which changes, as well as having to ask each application owner to check their data usage versus the new pricing and policies that are being published. This exercise will have to be repeated for each app. Matching policy changes to ‘use-cases’ with ACT With Axon’s ACT (Application Compliance Tool) product, all this information can be added once, allowing you to see exactly which applications contain which data, rather than going through each word document from the last re-certification. Not only will ACT help you to identify where there are changes for the applications, but Axon has also developed a system which will match a policy change to the use-case for your data, and notify you, as well as notifying you of the exchanges that are permissioned and the applications that are specifically affected by an announcement. For example, if you use NASDAQ for Non-Display only, ACT will let you know of changes to policy or pricing that will only affect the NASDAQ Non-Display use case, without showing you all the other information, unless you need it. Outsourcing with ADS Using ACT and PEAR will help you ride the crest of the policy Tsunami that is expected over the next few months. And if you think all his work would be better-managed by someone else, you can also outsource your market data completely to us with the ADS service. Each new rule for netting unbundled data charges, will be added to all those we already source from PEAR so that we get the best value for your market data spend, saving you money wherever we can by taking advantage of the reporting rules. Using technology to assist in the navigation through these difficult waters saves you time meaning you can get on with your day job. Still not sure where to start with streamlining your market data function? Why not have Axon’s Market Data Specialists come in and complete a review to show your current state and make recommendations for savings, efficiencies and process improvements. Either as a precursor to migrating to ADS or as a standalone piece of work, we can also now offer Axon’s compliance review service to help get a lay of the land before the waves crash.