Attorney General Eric T. Schneiderman says financial information giant Thomson Reuters has agreed to immediately discontinue its practice of providing high-frequency traders with early access to market-moving survey results.
This move was prompted by a current investigation by the Attorney General’s office into this matter.
Prior to this agreement, the company was selling early access to the University of Michigan’s consumer survey results, which are distributed exclusively by Thomson Reuters regularly. The University of Michigan’s consumer survey results are among the most closely watched indicators of consumer sentiment in the U.S.
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As such, traders were able to access and act on this information two seconds earlier than other subscribers who received the data. That two-second advantage is more than enough time for some traders to take unfair advantage, as they execute enormous volumes of trades in the blink of an eye. The Attorney General’s investigation into the scope and impact of this practice is ongoing.
“Promoting fairness and avoiding distortions in the securities markets is an important focus of this office,” says Attorney General Schneiderman. “The securities markets should be a level playing field for all investors and the early release of market-moving survey data undermines fair play in the markets.”
He adds the change of Thompson Reuters’ sharing policy immediately removes a prior distortion in the markets, and also sends a message that unfair timing advantages will not be tolerated.
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