Data vendor Exchange Data International (EDI) is to compete head to head with the London Stock Exchange on UK corporate actions data, in a move it positions as being a direct response to recent data pricing and distribution policy changes by the LSE.
EDI has been a vocal critic of the changes affecting LSE’s corporate actions data distributors since they were announced last year and, says its managing director Jonathan Bloch, it has argued with the exchange “to no avail”, with the result that it “ultimately… decided to start generating the information” itself.
As the only vendor that has been re-vending the LSE’s Stock Situation Notices (SSNs) EDI says it is uniquely affected by the LSE’s price and distribution policy changes – pitched by the LSE itself as an attempt not to simply extract more revenues from data vendors but rather to clarify an approach that was historically confusing and make it fairer, enabling smaller vendors to get more cost effective access to its data.
The exchange has reported positive feedback on the changes from other data vendors (Reference Data Review, October 2006).
EDI though is convinced it can not only avoid loss of revenue by generating its own UK corporate actions data, but also provide a superior service. EDI will not impose any restrictive distribution agreements for data use, it says.
The EDI service is live and available, and on April 2 the vendor will switch all its 250 clients currently taking the redistributed LSE service over to the new service. The vendor will continue to provide UK corporate actions data in the same format, containing the same fields, that its clients have been used to receiving, it says.
Says Bloch: “Since EDI’s inception in 1994 we have taken SSNs from the LSE and resold them. Last year, LSE changed its pricing and policy for SSNs, placing restrictions on their redistribution.” In response, EDI has been working on its own proposition for a year, and Bloch believes generating the data itself is “very good positioning for EDI” as a niche corporate actions data provider, and “means we will hold the intellectual property on the data”.
In order to compile the information, EDI monitors all the regulatory news services in the UK. “When we see an announcement, get the shareholder circular, speak to the company and speak to the regulator, we bring together all the data. We are confident our service will more than match the quality of the LSE’s; a third of LSE listed securities are stocks from abroad, and we already gather corporate actions information for foreign stocks,” he says.
EDI’s SSN service has performed well over the years in competition to the LSE’s direct provision of Stock Situation Notices, he claims.
Bloch says the reaction from its clients to its decision “so far has been very positive”. He adds that additional differentiators of the EDI service will include provision of information from multiple exchanges for dual and multi-listed stocks, and, later this year, the addition of access to shareholder circulars.