Britain’s FCA rules out major intervention in financial data market

By Sinead Cruise and Huw Jones

LONDON (Reuters) -Britain’s Financial Conduct Authority confirmed on Thursday that it had ruled out “significant interventions” in the market for stock and bond prices, saying that stopping banks and asset managers overpaying for data “could take years”.

The regulator examined competition in the markets for credit ratings data from Moody’s, S&P and Fitch Ratings, benchmarks and the “highly concentrated” 3.3 billion pound ($4.18 billion) data vendor services market.

Publishing its final findings on Thursday, the watchdog said it had identified areas where competition does not work well and that banks and asset managers may be paying higher prices for data than if competition was working more effectively.

“The quality and availability of wholesale data is integral to well-functioning wholesale financial markets,” said Sheldon Mills, Executive Director of Consumers and Competition at the FCA.

“We do not believe the case has been made for significant interventions. However, we will examine ways to help support wholesale data being provided on fair, reasonable and transparent terms,” he said.

The final report is in line with initial findings last August.

The FCA said it would review rules but changes could “take a number of years” given the international nature of some of the markets.

British markets industry body AFME, whose members are users of financial data for trading stocks and bonds, said the findings were consistent with AFME’s concerns.

The FCA should take a “holistic approach” to data as it develops rules for single, real-time price feeds or “consolidated tapes” for stock and bond markets to help investors spot the best deals, AFME said.

“A consolidated tape could increase competitive pressure on existing wholesale data providers, resulting in cheaper, higher quality and more accessible data for users,” the FCA said.

David Schwimmer, Chief Executive of the London Stock Exchange Group, a major producer of market data, said the FCA refers to the importance of fair, reasonable and transparent distribution of data.

“That’s exactly how we approach that business as both a provider of and a consumer of data,” Schwimmer told reporters.

($1 = 0.7898 pounds)

(Reporting by Sinead Cruise, editing by Iain Withers and Mark Heinrich)