Despite acknowledging areas for improvement in the distribution of wholesale market data, the Financial Conduct Authority (FCA) has decided against intervention due to the risk of “unintended consequences.”
The UK regulator has been conducting a thorough investigation into competition in the markets for credit ratings data, benchmarks, and market data vendor services. It has determined that substantial intervention may lead to negative outcomes, such as impacts on data availability and quality, in a market that is crucial for global investors.
Throughout its assessment, the FCA identified shortcomings in competition across the three markets. The study suggests that users may be paying higher prices for data compared to what they would under a more effective competitive environment.
Instead of pursuing wholesale enforcement, the FCA plans to advance initiatives that promote the availability of wholesale data on fair, reasonable, and transparent terms as it works towards amending assimilated EU law.
Sheldon Mills, the executive director of consumers and competition, stated, “Our market study found that firms can access the data they need to make effective investment decisions. 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.”