We asked for your input on the changing use and value of data in wholesale financial markets. Here, we set out our analysis, findings and next steps.
Why we asked for input
We wanted to identify possible issues caused by the changing use and value of data, and decide whether we needed to do further work to assess or address harm in wholesale markets. We also wanted to understand any benefits these changes may bring, to ensure that our regulation does not impede beneficial innovation.
So we asked for your thoughts on this in our call for input (CFI).
What we heard
Respondents to the CFI highlighted several areas where competition may not be working as effectively as it should do in the provision of trading data, benchmarks and market data. We set out the feedback we received and our thinking in this Feedback Statement along with next steps.
Who this applies to
This Feedback Statement will interest stakeholders across the wholesale sector, in particular:
- suppliers, buyers and users of data, and related products and services within wholesale financial markets
- any other stakeholders who interact with wholesale market participants, may indirectly be affected by topics covered in this review
Background to our work on accessing and using wholesale data
Our Call for Input looked at the changing use of data and what this has brought – and will continue to bring – to wholesale markets, transforming business models, competitive dynamics, and how financial markets function.
It closed on 7 January 2021 (we extended the original deadline of May 2020 because of the pandemic).
Recognising the importance of this sector we will undertake a significant program of work over the next year and beyond to understand and, where appropriate, address the potential harms we have identified. Our proposed next steps are:
- an information gathering and analysis exercise in Spring 2022, focused on the pricing of trading data, underlying costs, and the terms and conditions of the sale of trading data
- a market study looking at how competition is working between benchmarks. We plan to launch the market study in summer of 2022 and will publish more details of the scope and timetable at that time.
- a market study looking at competition in the sale of credit rating data. We plan to launch the market study by the end of 2022 and will publish more details of the scope and timetable at that time.
- commissioning research on the nature of alternative data and advanced analytics