Thomson Reuters Lifts Restrictions On Use Of Its Codes
Financial data vendor Thomson Reuters is to ease restrictions on the instrument codes it uses and will make them accessible to financial institutions beyond its desktops and feeds.
Following a similar move by rival Bloomberg in 2010, Thomson Reuters will make its Reuters Instrument Codes (RICs), which identify securities, available to customers and any other financial market participants to use its instrument codes for trade processing purposes.
However, it remains to be seen if the move by Thomson Reuters will appease European Union regulators over its long-running antitrust probe. In 2009, the European Commission opened proceedings against Thomson Reuters over possible abuse of its dominant market position in the supply of RICs.
In March this year, the Commission said that remedies introduced by Thomson Reuters did not go far enough. The Commission, which can fine a company up to 10% of its annual revenues for breaching competition rules, said that the data vendor could be abusing its dominant position in the market by stopping customers from using RICs for retrieving data from alternative providers.
“This move by Thomson Reuters comes at a crucial time as the market faces serious pressure from the regulatory community to get a better handle on data across the organization for reporting purposes and to better inform business decision-making,” said Virginie O’Shea, post-trade technology analyst at Aite Group, a consultancy.
“There is little appetite and scarce resources to adopt a new standard, so being able to work with one of the established data symbols across the trade lifecycle will enable firms to tackle the cross-referencing exercise on the front foot.”
Data provision and access is a key battleground in financial markets as automated trading takes hold. But market fragmentation is forcing many investors to use multiple data feeds, which makes tracking of data more complex. New regulations have also increased the burden of risk management and trade reporting. Firms use instrument codes for price discovery and trade analysis as well as settlement and transaction reporting.
Bats Chi-X Europe, the region’s largest equities trading venue by market share, has already agreed to use Thomson Reuters’ alphanumeric ticker-like codes across its trading platforms.
“Cross referencing the Bats Chi-X Europe instrument codes with the Thomson Reuters RIC symbols will enable us to reach new market participants as well as improve efficiency and data transparency by facilitating accurate identification of securities on our platform,” said Paul O’Donnell, chief operating officer of Bats Chi-X Europe. “We welcome this move by Thomson Reuters and are pleased to sign up to this offering.”
RICs are an integral part of Thomson Reuters’ service, as they enable its customers to identify and retrieve data from desktops, feeds and other content services. RIC symbols are provided for a broad range of content by Thomson Reuters across equities, bond markets, FX and money markets, commodities and energy, funds, indicators/indices and derivatives.
“The RIC’s unique characteristics make it a natural choice for the identification of securities in trade processing,” said Gerry Buggy, global head of enterprise content at Thomson Reuters. “By offering the RIC to all market participants, Thomson Reuters promotes operational efficiencies and supports competitive advantage as financial market participants can more reliably communicate with each other and capture more order flow. As our customers move to meet regulatory demands and reduce costs, we are pleased to take this first step in supporting the financial community’s symbology needs across all parts of the trading life cycle through our evolving symbology services.”
CEDX opened on 6 September, offering contracts on Cboe Europe single country and pan-European indices.
The MOU covers certain security-based swap dealers and participants.
Equity underwriting on European exchanges rose 70% in the first half.
The analysis is based on transactions publicly reported by 30 European APAs and venues.
A similar service is available on the BIDS platform in the US equity market.