Thomson Reuters to halt advance data release
Thomson Reuters will suspend its practice of distributing results from consumer surveys a couple seconds early to clients who pay the news and business information provider for advance access.
A company spokeswoman said Monday that Thomson Reuters will simultaneously distribute survey data at 9:55 a.m. starting Friday from the University of Michigan Surveys of Consumers after New York State Attorney General Eric T. Schneiderman requested the suspension.
The attorney general's office is investigating the early data access, and Thomson Reuters said it is cooperating with that review.
Thomson Reuters pays for exclusive access to the University of Michigan results, and some of its clients have been paying extra to receive the data two seconds before other clients receive it at 9:55 a.m. This allows high-speed computers to make trades before others gain access to the data.
Thomson Reuters then sends out a news release about the survey at 10 a.m.
Modern stock trading is dominated by automated computer systems that make trades in fractions of a second, and traders can profit from receiving data even milliseconds before its public release. Consumer sentiment regarding the economy is watched closely because consumers' spending accounts for about 70 percent of U.S. economic activity.
The office of New York's attorney general said in a statement the two-second edge that Thomson Reuters gives to some high-frequency traders amounts to an unfair advantage as those traders "execute enormous volumes of trades in the blink of an eye."