Trading | Market data
total income of £852.9m, in the year to 31 March 2013 (compared to £218.9m from £814.8m in 2012). That was almost a 40%rise over a year earlier and contrasts with the capital markets segment for multi-asset trading declining £34.4m or 11.4% over the same period. Within LSEG’s Information Services segment
sits the sale of real-time price information and a range of other information services from indices to post-trade analytics, as well as fees based on the number of terminals taking the exchange’s real- time price and trading data and subscription fees for data. Meanwhile, LSEG’s technology services, spanning fees for network connections and server hosting pulled in 6.6% more income than the previous year. Steve Woodyatt, CEO and chairman of
Object Trading, a London-headquartered vendor providing a single interface to the world’s markets for the buyside, sellside and technology partners, reflecting on the evolution of charges levied by exchanges refers to a heated industry panel discussion he attended at last year’s International Derivatives Expo (IDX) in London. Woodyatt noted, “The buyside attendees
during that session were raising the vexed issue that the exchanges were not moving their costs, while the sellside complained that they were being
pushed thin at the margins. On top of this they had the added cost of regulation and compliance to contend with. And, there is only one place that the increased cost of doing business can go – to the buyside. However, they are saying they cannot or do not want to pass it on to the investor.” Woodyatt added, “When one looks at the
buyside and where it’s going to be squeezed on margins, the issue in Europe and the US is that the exchanges are very busily trying to hold their ground on costs. They are shifting things around and certainly one sees cases in Europe where they are now increasing data and technology charges in order to maintain margins.” A year on and Woodyatt thinks the situation is
pretty much “business as usual” as far as market data and technology charges levied by exchanges go. “It’s rather analogous to the old story of the Emperor’s new clothes. Everyone knows this movement really has to happen but no one probably knows where to start the discussion and does not want to be the first to initiate it.” The issue remained pertinent for delegates
at this year’s IDX event in London in late June. During ‘The View from the Top’ debate with various exchange CEOs an audience poll revealed that 45% believed exchange charges (unspecified) would be higher in 2014.
“It’s rather analogous to the old story of the Emperor’s new clothes. Everyone knows this movement really has to happen but no one probably knows where to start the discussion and does not want to be the first to initiate it.” Steve Woodyatt, Object Trading
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Best Execution | Summer 2013
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