When we field the question "what type of organisation would require specialist Market Data Audit processes, the most obvious candidates that spring to mind are those which we could categorise as Traditional Trading Venues, to wit, the multitude of established national Equity, Commodity and Derivatives Exchanges'.
It is probably true to say that the majority of Traditional Trading Venues which have a pricing regime in place for their Data Products have engaged in Market Data Audit to a greater or lesser degree.
However, the primary driving force in the requirement for Traditional Trading Venues to engage in the Market Data Audit process is not actually the fact that they are primarily trading venues, rather it is the fact that each trading venue is also a Primary Producer of Proprietary Data Content as a by-product of the main business of providing a market place for the matching of buyers and sellers. This Proprietary Data Content is valuable, perishable and must be managed prudently.
As such, the requirement for the implementation of Market Data Audit type processes can be extended to any organization which disseminates Proprietary Data Content and requires payment in respect of the usage of such data content. In addition, there is a case to be made that the population of Data Aggregators of 3rd party data content would be exercising an appropriate level of prudence in auditing their customers' reported usage of such data sets. Hence, the need for Market Data Audit processes is extended to Index Providers, Interdealer Brokers, Rating Agencies, Over-the-Counter ("OTC") firms, Price Reporting Agencies and a multitude of other firms providing unique proprietary data sets.
With the innovative usage of Proprietary Data Content in a constantly changing market, the need for Market Data Audit has increased exponentially since the turn of the century. At Exchange Ancillary Services, we have designed and implemented Market Data Audit Solutions for a wide range of these organizations since we commenced operations in 2004.