(Alliance News) - The UK Financial Conduct Authority on Tuesday said it will launch two probes this year into the provision of wholesale financial data by stock exchanges and credit ratings agencies.
The FCA said input it has received so far raised concerns that "limited competition in the markets for benchmarks and indices, credit ratings and trading data may increase costs for investors and affect investment choices."
The financial regulator said the first of the two investigations will begin this summer with a look in whether "complex contracts" for benchmarks and indices prevent switching to cheaper or better-quality alternatives.
By the end of the year, the FCA will launch a second study looking at "whether high charges for access to credit ratings data is adding costs to investors and limiting new market entrants".
The FCA said that concerns have been raised that limited competition for wholesale trading data provided by trading venues such as stock exchanges "may increase costs and have an impact on the types of assets that investment managers buy and sell".
The main provider of share trading data for the London market is the London Stock Exchange Group PLC, though the FCA did not name LSEG in its announcement on Tuesday. LSEG shares were up 0.8% to 7,232.00 pence on Tuesday morning.
"Access to wholesale data is really important for those who want to make investment decisions. Without it, they lack the information they need to make properly informed choices," commented Sheldon Mills, executive director for Consumers & Competition at the FCA.
"Our call for input and planned market studies are intended to ensure that competition is working well, that information is available to market participants that want it, and that innovation is keeping up with market developments."
By Tom Waite; thomaslwaite@alliancenews.com
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