Until 2005 or so, the classic sources of market and reference data, stock exchanges, vendors and broker/dealers, focused their product offerings, pricing models and Terms & Conditions on the end-user displaying the data on a desktop. Today, these market data providers have to consider a reduced desktop population, the huge impact of programmatic or ‘black-box’ trading, and new advanced technologies for displaying and distributing their data. On the user side many institutions are finding it increasingly difficult to keep pace with the development of applications that have to meet new and complex business requirements and the resulting, sometimes opaque use of market data.
In response to this dilemma, vendors and exchanges have increased the number of compliance audits they conduct. Initially through a Remote Audit, sometimes followed by an On-Site Audit, clients must disclose to whom the sources’ data is available, whether through display or non-display applications, and usually explain what business functions use the data. In doing so, stock exchanges, data vendors and broker/dealers want to protect their intellectual property rights, identify any unauthorized use and take corrective measures if unauthorized use of data is found. This, in turn, may lead to substantial back billing over a period of years.
Screen can assist its clients with managing these compliance audits and in becoming compliant with the agreements of the providers of market data. Through its modular COMPASS offering, Screen may provide assistance in managing your market data compliance at any stage.
Our services in this area include:
• Reviewing client’s market data desktop usage and data access declarations
• Reviewing client’s internal display applications that source data from exchanges and/or vendors
• Reviewing the Terms & Conditions of the agreement(s) with the source covering the audit period
• Creating an analysis for the client of the audit period; the exposure and the risks
• Reviewing the preliminary audit report as issued by the market data source or their auditors
• Developing client’s response to audit findings from the preliminary audit report
• Clarifying client’s position on unit of count and other criteria defined by the market data source
• Providing details on the internal display and non-display applications in question
• Calculating client’s financial reporting and declaration position for the audit period
• Assisting client in personal meetings with staff from the market data sources and/or their auditors
A Case Study explaining how to get in compliance with the Terms & Conditions of stock exchanges, market data vendors and third party data providers is available for download HERE >>
An overview outlining Screen's compliance proposition in more detail (COMPASS offering) is available for download HERE >>
The Whitepaper 'Audits are a tricky and contentious topic' as published in the Screen Event Amsterdam 2012 event guide (a Special by Banking & Finance) is available for download HERE >>