The London Stock Exchange has published a draft licensing and pricing policy for its enhanced Sedol Masterfile (SMF) service, to be introduced next year.
The new proposals provide for a one-off enterprise licence priced at £50,000 a year, which will be cost-effective for a firm with four or more subsidiaries using greater than 10,000 Sedol codes. There is also a series of four entity (individual company) licence bands based on usage rates. These range from £5,000 a year for a single legal entity using less than 1,000 codes up to £15,000 for one using more than 10,000.
The licence fees will be payable whether the user sources the data directly from the exchange or through a data vendor. A distribution licence will be available to information vendors who redistribute SMF data, but information vendors who are also operating activities such as trade matching services will need to have a user licence as well.
The document also lists a range of one-off charges such as a £50 fee for requesting new securities via e-mail or fax, with fulfilment in 24 hours, and a £100 fee for a new security request ‘express’ with a 4-hour response time. Telephone charges are set at £1 per minute. License holder can access the SMF website free of charge, from where they can search historic and new SMF data and create new SEDOL codes in real-time.
All users must have their licences in place before the live date for the introduction of the service on January 5 next year. They must also ensure that their systems will be capable of handling the new codes.
With the exception of the fax, e-mail and telephone services, all existing SMF services are to be discontinued when the enhanced service goes live at the beginning of next year. The LSE plans to contact all existing users by the end of April to explain the migration procedure. It also plans to introduce a testing facility, but has not yet confirmed a date.
Expansion Program
The enhancement of the 30-year old SMF service is being conducted as part of the exchange’s plan to expand its Sedol codes from seven-digit numeric code to alphanumeric codes, providing increased capacity in code issuance. The benefits for SMF users will include real-time issuance of new Sedol codes, greater coverage of listed equities and fixed income instruments globally, and easier identification of the market an instrument is traded on through mapping to Market Identifier Codes (MIC). The changes to the codes will apply to new codes only; the existing numeric Sedol codes will not be renumbered.
The exchange says that the change in the licence structure and prices reflects the additional functionality that the introduction of the enhanced SEDOL codes will represent, and the resulting costs savings for users from the reduction in trade failure and the streamlining of manual processing.
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