Trimming Market Data Costs for Hedge Funds

Date: Thursday, January 25, 2018

2018 has begun and we have all just about recovered from MiFID II shocks (but not the workload). If one of your new year’s resolutions was to strike out on your own maybe you’ve launched a new hedge fund. You may even currently be at a hedge fund but are planning to expand into new markets this year. Or perhaps you need to save money on your costs by trimming the fat. If it is the latter, then the best place to start is with your market data. If you are a lean shop, you may have very limited resources to cover your existing setup, including IT, infrastructure and contracts. Market data optimisation is time consuming and requires expertise to dig through all the market data usage and check with your traders who needs what data, and for what purpose. Getting to grips with this can be a challenge that you simply don’t have the time, or the appetite, to take on. Axon has developed a solution to solve this very problem for firms that need to manage their market data spend and avoid costly errors, while making the best use of the limited resources they have. There is no competitive advantage for firms to examine the market data policies of over 160 venues, to learn what they can and can’t do with the data from specific exchanges, so Axon have done the work for you.

"This is the underlying principle behind the Axon product platform and there are several different solutions available depending on your needs."

. Do you have a market data team? Or can you afford to spend some time getting your market data management into shape? PEAR is Axon’s industry-leading market data exchange policy database containing the market data rules for more than 160 venues summarised into plain English, rather than legalese. It can run comparison reports across multiple trading venues, to give a clear picture of your reporting and licensing obligations depending on your usage of data from the various exchanges. When you expand into new markets, or consider building a new application, you can use the advanced ‘WhatIf’ scenario builder functionality in PEAR to see exactly which data licenses you would require, based on your specific use-case. You can also use PEAR to analyse your current entitlements and licensing, to confirm that you are not under, or over-reporting. This is a great tool for finding cost-efficiencies for your firm. Still don’t know where to start? If you don’t know where to start with the data usage comparisons mentioned above, ACT provides bespoke application onboarding and recertification questionnaires for your data users, providing you with a consolidated view of where, what, and how data is being used within your applications. This enables you to validate the data that is being used by your applications. ACT also has the capability to allow firms to compare application use-case, to licences held, which highlights any gaps in your current data licencing, and generates a shopping list of required licences. Need a complete review? So, this all sounds great, but what if you are unsure of your firm’s data usage, what is being consumed, and how? It would take weeks of effort to gather that information, as you don’t necessarily have in-house expertise in understanding what it is you need to look for, or where to find it. The Axon Compliance Review (ACR) is the perfect solution. We analyse your exchange licensing, reporting, entitlements and usage data, and perform a full audit to identify any gaps in licensing as well as any instances of over, or under-reporting. The Compliance Review Service helps firms optimise their data usage spend, and provides recommendations on how to improve market data management going forward. Still don’t have time for any of this? If you would like this task taken off your hands completely, then the Axon Declaration Service (ADS) allows you to outsource all your market data reporting and compliance obligations to Axon. You supply us with some information around the entitlements and usage of exchange data, and we do the rest. This includes taking advantage of netting policies and role-based exemption programs, to get you the best value for your expenditure. We manage your reporting based on your business rules, as well as those of the exchanges. As these rules change, we automatically apply the necessary amendments, keeping you compliant and ensuring cost optimisation. Contact us for more information today at