Market Data & Excel spreadsheets: a Compliance Headache
An increasing number of our clients have shared with us their concerns around effectively managing vendor data costs and ensuring compliance with Market Data usage agreements. For example, exporting market data from trading terminals is common usage, but one that can often lead to compliance issues.
One of our clients was recently forced to implement a compliant solution within a short time-frame to tackle issues related to numerous spreadsheets used across front, middle and back-office functions.
A typical situation…
Exporting data into spreadsheets is a popular way of using trading terminals, and users have often leveraged this capability for their daily challenges.
The problem is that in most cases, exporting vendor data in this way risks breaching the data vendor’s usage agreement. Non-compliant usage includes: sharing market data in an Excel file with a colleague, storing a snapshot of time series, or running a risk model in Excel based on fresh market data.
A survey from The Market Data Company (2016) shows that 28% of terminals are installed on the desks of non-trading investment functions — in risk, compliance or the back-office — hence greatly increasing the compliance risks associated with exporting data from these terminals.
With the multiplication of spreadsheets, the overall volumes of data requested increase, breaching data limits in place with the data vendor, who would then typically investigate the reason of these high-volumes.
.. turning into a data compliance headache
In the case of our client, the data vendor identified quickly that spreadsheets were using the market data in a non compliant way, and were responsible for the high volumes.
Faced with this situation, the firm was required to rapidly demonstrate that it had a plan to return to a compliant situation, while limiting the impact on daily operations.
How to solve this?
After evaluating several possible solutions including internal development, the client worked with AIM Software to establish a central repository of reference data using GAIN Data Portal. The application can be directly accessed by spreadsheets, and any other application within the organization.
The firm now has a solution to continue using spreadsheets fuelled with up-to-date market data – and importantly, in a compliant manner. In addition, the firm gained a central platform that provides full control over data usage.
To learn more, download the case study