Feb 07, 2014
Our Take: Wire Services & High Speed Trading
In today’s Wall Street Journal, Financial Markets reporter Scott Patterson published an article regarding the impact a press release newswire can have on High Frequency Trading (“HFT.”) The article – “Speed Traders Get an Edge: Paying for Direct Access to News Releases Can Give a Lucrative Time Advantage” – is available here for WSJ subscribers.
In his article, Patterson describes how some trading firms are able to gain advantageous access to press releases issued by Business Wire and MarketWired, capitalizing on the nanoseconds that lapse as material news is relayed from the newswire vendors to the web, media outlets and trading systems.
PR Newswire’s position on the topic is clearly stated in the WSJ article:
“Business Wire’s competitor, PR Newswire, says it doesn’t provide trading firms access to its “Disclosure Feed” despite frequent requests. The company says it provides the news feed to clients with the understanding that information provided won’t be used for trading purposes.”
Our distribution technology and processes are designed to meet both the spirit and letter of RegFD, the broad, non-exclusionary distribution of our clients’ material news, and we believe it serves the best interest of our clients.
There are certain media outlets we classify as disclosure points that receive the above-mentioned “Disclosure Feed,” which delivers material information to those disclosure points, including Bloomberg, Thomson Reuters, the Associated Press and Dow Jones.
Brokerage websites typically receive the news feed from a news aggregator, while a trader receives it via a market data provider such as Bloomberg, FactSet or Thomson Reuters.
PR Newswire has, over its nearly 60 year history, worked to ensure that our clients’ material disclosures are disseminated fairly to all parties and are compliant with federal regulations for news distribution and industry best practices. We made a conscious business decision not to sell high frequency nor algorithmic trading firms our Disclosure Feed. We believe this decision serves the best interests of both our corporate clients and the capital markets.
Author Jason Edelboim is PR Newswire’s senior vice president of global media & distribution.