News service, PR Newswire, announced a deal today with New York state attorney general, Eric Schneiderman, designed to curb preferential access to news by high-frequency traders (HFT).
The firm announced that it has adopted a couple of new policies for the issuance and distribution of market-moving news that aim to promote integrity in the market and prevent preferential access to material news by high-frequency trading firms.
For one, it will require its direct data feed recipients to certify that they will not engage in high-frequency trading when using direct feeds. In the past, PR Newswire declined to provide its primary direct data feed to high-frequency traders, but today’s agreement turns that practice into a formal policy at the company. Additionally, PR Newswire’s customers will have to certify annually that the direct data feeds they receive will not be used for high-frequency trading.
Second, the firm also agreed to advise its customers that are seeking to release information upon the close of the markets to hold their news until 4:01 p.m., to ensure that high-frequency traders do not have the ability to trade on the news in the milliseconds after the closing bell.
“Innovative business practices serve our clients’ best interests and today’s announcement strengthens our commitment to industry-leading policies and fair access to market-moving information,” said Ninan Chacko, CEO of PR Newswire.
“By going the extra mile to ensure its service is not abused by high-frequency traders – at any time during the trading day and in the moments after the closing bell – PR Newswire has proven itself to be an industry leader,” said Schneiderman.
This agreement is the latest effort from the New York state attorney general’s office to combat what it has called “Insider Trading 2.0”, which involves HFTs getting preferential access to market moving news, which has included previous deals with news providers and industry firms.