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Greater Effeciency Needed in Wholesale Data Markets Reveals FCA

The Financial Conduct Authority (FCA), the UK financial regulator, is working to create the right conditions for investment, innovation and sustainable growth in the UK. On its mission to achieve this, the regulator has published findings on its wholesale data market study.

The FCA study examined competition in the markets for credit rating data, benchmarks and market data vendor services. It has ruled out significant intervention because of potential unintended consequences, such as on the availability and quality of data, in a market relied upon by investors worldwide.

However, across all three markets, the FCA identified areas where competition does not work well. Users may be paying higher prices for the data they buy than if the competition was working more effectively.

As a result, the FCA has expressed its intention to take forward ideas to help support wholesale data being available on fair, reasonable and transparent terms. This is a part of its work to ‘repeal and replace’ assimilated EU law.

Sheldon Mills
Sheldon Mills, executive director for consumers and competition, FCA

Sheldon Mills, executive director of consumers and competition, FCA said: “The quality and availability of wholesale data is integral to well-functioning wholesale financial markets. 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.”

The report is part of the FCA’s work to help strengthen the UK’s leading position as a global and vibrant financial centre, by creating the right conditions for investment, innovation and sustainable growth, built on globally respected high standards.

The FCA will continue to consider allegations of anti-competitive conduct in all markets including in wholesale data markets. Additionally, the FCA has powers to tackle this under the Competition Act.

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