Huw Jones

LONDON (Reuters – Over the past five year, the price of the data in bond markets has risen by 50%, which may cause users to abandon the market and reduce liquidity, industry body AFME stated on Thursday.

Asset managers, big banks and asset managers have already stated that data about share trades was too expensive. This complaint has been rejected by exchanges. However, the Association for Financial Markets in Europe is now focusing on fixed income data costs.

In an effort to strengthen its capital markets after Britain’s departure, the European Union proposed “consolidated tape”, which collects and provides access to stocks and bonds in real time to improve liquidity and transparency.

Britain has floated a bond-tape plan as well, though it will not address the core issues of data costs. Adam Farkas Chief Executive at AFME stated that a tape alone would not fix them.

If this problem is not addressed, market players might have to reduce their data purchase to a minimum. Farkas explained that in certain cases it may lead to strategic withdrawals from some markets.

Expand Research produced a report for the AFME on data prices in fixed-income. The Expand Research report used information from 10 major market makers (all AFME members) and additional sources.

The report stated that costs have increased regardless of how many market users they are. This is due to prike increases and changing charging structures.

It said that the cost of fixed income data has risen faster than that for equities. Market participants use it to search for the best deal across the market.

(AFME Fixed Income Costs Graphic, https://fingfx.thomsonreuters.com/gfx/mkt/byprjxqjlpe/AFME%20Fixed%20Income%20Data%20Graphic.PNG)

While the banking sector has complained about data on share prices, it has tended to focus on exchanges. The AFME report however stated that fixed income relies on other non-exchange pricing data, such as terminal prices, research, and analytics.

AFME stated that it wants standardised pricing for data purchases, consistent storage formats and uniform access procedures.

The Financial Conduct Authority of Britain signalled in January a shakeup in the financial markets data, citing “limited competitors”.