This week’s Inside Market Data reads like a laundry list of issues affecting the market data industry, from low latency to broadening datasets and access to content (whether by acquisition or distribution alliances), from data management platforms to the increasingly sophisticated content sets and analytics making those platforms a necessity, and from the tick data that drives the people of this industry to the people who make the data industry tick.
Let’s start with latency, which has challenged the data industry for a decade. Then, the issue was reducing latency; later, it was how to handle the resulting capacity. Now, firms are grappling with the cost of achieving miniscule increments—at least in the most liquid, high-frequency asset classes. However, the latency race is still evolving in other asset classes such as fixed income, where European bond trading platform MTS has introduced an un-netted, ultra-low-latency feed of data from its 10 most liquid markets.
In addition to new asset classes, latency is also reaching further afield geographically, prompting network providers to establish or upgrade connectivity into emerging regions around the globe, such as Taiwan, where IPC is upgrading its links from nearby Singapore and Hong Kong, to meet demand from local traders seeking access to the Taiwan Stock Exchange. Similarly, Colt-owned infrastructure provider MarketPrizm is expanding its presence in the Asia-Pacific region, as well as eyeing connectivity to other markets, including India and Russia.
In other regions, emerging markets are taking a different approach to how they make their data available to a wider audience, such as by utilizing “exchange hubs” like Wiener Börse—which continues to add data from Eastern European markets, including the Central European Gas Hub Exchange and the Belgrade Stock Exchange, while revamping its own datafeeds—to carry their data via its feeds, in turn increasing its value as a gateway to Eastern Europe.
Dealing with low-latency infrastructures aside, firms are also under pressure to effectively manage the wealth of other information spewing into their organizations, and to ensure that data remains consistent when used for different functions by separate areas within a firm. For example, Calif.-based investment manager and research provider Research Affiliates is still loading content onto a data platform built by Sapient Global Markets, which the firm originally rolled out last year to ensure data quality and consistency.
And with vendors like Thomson Reuters buying the mutual fund data business of Canada’s Globe and Mail to expand its local data, and FTSE acquiring ESG research firm LCE Risk to create new datasets and tools for managing exposure and identifying new sources of alpha, the amount and complexity of data being delivered can only increase.
But in all the excitement over new technologies, it’s easy to forget that while complex algorithms now perform much of the heavy lifting, it’s still people who tell the algos what to lift and where to put it. FTSE’s acquisition of LCE was in no small part to hire its founders and obtain their expertise, while Bloomberg’s poaching of NYSE Technologies CEO Stanley Young reflects the fact that people with a vision who can run data companies are in short supply and high demand.
Finally, it would be remiss of me to pass comment on any low-latency data initiative without mentioning our own efforts in the real-time space. Hopefully you’ve noticed that we’re now breaking more news online as it happens, and using our weekly print edition to expand on those stories—as part of the “online first” philosophy adopted by our WatersTechnology stablemates. Fear not, we won’t stop printing IMD—in fact, we’ll still have exclusive stories every week that will appear first in print, as well as the longer analysis stories that so many of you have been asking for, delivering the best of both worlds, online and in print. In an ever-changing marketplace, we hope you’ll agree that this evolution will prove to be a change for the better.
Bill Murphy, CTO of Blackstone, once again joins the podcast to discuss the private equity firm's new offices, designed to house its innovations team.Subscribe to Weekly Wrap emails