FCA finds wholesale data market can be improved

Financial regulator finds wholesale data market can be improved 

The Financial Conduct Authority (FCA) has today published the findings of its wholesale data market study, which examined competition in the markets for credit ratings data, benchmarks and market data vendor services.  

The regulator has ruled out a significant intervention because of potential unintended consequences, such as on the availability and quality of data, in a market relied upon by investors worldwide. 

However, across all 3 markets, the FCA has identified areas where competition does not work well. Users may be paying higher prices for the data they buy than if competition was working more effectively.  

The FCA will take forward ideas to help support wholesale data being available on fair, reasonable and transparent terms as part of its work to 'repeal and replace' assimilated EU law. 

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: "The quality and availability of wholesale data is integral to well functioning wholesale financial markets. 

"Our market study found that firms can access the data they need to make effective investment decisions. 

"We do not believe the case has been made for significant interventions. However, we will examine ways to help support wholesale data being provided on fair, reasonable and transparent terms." 

The report is part of the FCA's work to help strengthen the UK's leading position as a global and vibrant financial centre, by creating the right conditions for investment, innovation and sustainable growth, built on globally respected high standards. 

The FCA will continue to consider allegations of anti-competitive conduct in all markets including in wholesale data markets. The FCA has powers to tackle this under the Competition Act. 

Notes to Editors 

1.  The market study was conducted using the FCA's powers under the Enterprise Act 2002.

2.  The FCA published its Update Report in August 2023, which set out the proposed reasons for not making a Market Investigation Reference. 

3.  The Smarter Regulatory Framework (SRF) is HM Treasury's programme of secondary legislation to replace assimilated EU law to deliver financial services tailored to the UK. 

4.  Both the UK Benchmarks Regulation (BMR) and the UK Credit Ratings Agency Regulation (CRAR) will be reviewed under the SRF to establish which aspects of both regimes will be carried over into the FCA's handbook.