Exchange Ancillary Services

Once the decision has been made by the Data Content Provider to execute a Market Data Audit programme, the question becomes... Where do we start? It is a given that the individual Data Content Provider can only project effective technical control over it's proprietary data at the point of delivery - subsequently, direct technical control over proprietary data diminishes exponentially the further removed from the point of delivery the data filters. The Data Content Provider can undertake a number of simple steps in order to instil as sense of good audit hygiene prior to embarking on an audit programme:

1. Individual elements of proprietary data can only be technically authorised for release once the customer has contracted for that individual element of data, do not authorise a customer for the universe of data when they have only subscribed for elements of data;


2. Non real-time data products should only be authorised for customers once the appropriate time delay has been applied. Real-time data should never be authorised to feed non-real-time customers - give them enough rope and they may very well hang everybody!

There is a logical case to support the view that the Data Content Providers should also initiate Market Data Audit programme on the basis of proximity to the point of delivery. Once the individual Data Content Provider knows the exact proprietary data content input to any individual customer, then we have a basis for expectation of what the outputs will be in terms of data usage reported or data products sold onward.

As a result, we would normally recommend that a Data Content Provider embarking on the audit journey commences their programme with those direct customers to whom proprietary data is supplied directly be they Quote Vendors, Data Distributors, Direct Feed Member Firms or Direct Feed End-Users. Commencing any audit programme with this constituency will give the individual Data Content Provider valuable insights into how proprietary data is manipulated, authorised, packaged and priced prior to being released to the wider market. The Market Intelligence to be gained during the course of these audits is invaluable and provided the Data Content Provider with the knowledge to monetise innovate usage of proprietary data sets.

Subsequently, those parties accessing the Data Content Providers proprietary data indirectly via the constituency mentioned above can then be audited, normally under the auspices of the audit rights contained within 3rd party Agreements. At this point, the Data Content Provider can regularise the position with un-licensed Sub-Vendors and audit proprietary data usage at a multitude of End-Users.

The beauty of this Market Data Audit process is that it is more than self-financing - it will recover fee and licensing income which otherwise have never been identified or reported to the Data Content Provider. In addition, future revenue streams are enhanced and protected, whilst valuable Market Intelligence is flowing back to the Data Content Provider providing insights into future additional revenue streams.

Summarising, the types of Market Data Audit Services we design and execute for our Data Content Providers are:

1. Quote Vendor Audit /Sub-Vendor Audit/Quote Meter Audit/Price Per Request ("PPR") Audit;
2. Direct Member Audit/Direct End-User Audit;
3. Indirect End-User Audit.

Should any further information be required regarding the services we offer, our auditing approach and ethos, or our audit experience, please contact us.