PR Newswire, a news distributor, will require its direct data feed recipients to promise they won’t use the information to trade ahead of the market.
It will also tell customers who want to release information at the close of the markets to wait until 4:01 p.m., to ensure that high-frequency traders aren’t able to trade on the news in the milliseconds after the closing bell.
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New York’s Attorney General Eric Schneiderman reached similar agreements with Business Wire and Marketwired earlier this year.
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“High-frequency traders can use information in the milliseconds before it becomes widely available to other investors, effectively skimming from the rest of the investing public. Today’s agreement is another important step toward curbing Insider Trading 2.0,” says Schneiderman.