Stock Clearinghouse to Suspend Data Feed Criticized for Leaking Trading Info Suspension comes after The Wall Street Journal reported on the feed last month By Alexander Osipovich Updated June 7, 2023 5:30 pm ET The Depository Trust & Clearing Corporation sells certain data feeds as part of its market-data business. PHOTO: CHRIS HELGREN/REUTERS The clearinghouse that processes U.S. stock trades will stop offering a data feed that drew controversy over accusations that it was leaking sensitive trading information. The Depository Trust & Clearing Corporation said it would indefinitely suspend the data feed, called Investor Kinetics, effective July 31. Last month, asset managers such as T. Rowe Price and Southeastern Asset Management expressed worries that the data distributed over Investor Kinetics and another DTCC offering, Equity Kinetics, could be used in ways that harmed their customers. Both data feeds drew on proprietary activity from the clearinghouse to paint a picture of market activity. DTCC sells such feeds as part of its market-data business. A May 9 report from brokerage Themis Trading alleged that sophisticated trading firms could use the two DTCC data feeds to sniff out when institutional investors were buying or selling large quantities of stock, and trade ahead of those big transactions. Themis’s report and the asset managers’ criticism was featured in The Wall Street Journal. In a statement emailed to the Journal late Tuesday, DTCC reiterated its stance that it had carefully designed the data feeds to avoid exposing sensitive data, but was nonetheless pulling the plug on Investor Kinetics after industry feedback. “In response to ongoing client and industry concerns centered around the Investor Kinetics service, we have decided to suspend Investor Kinetics indefinitely,” Tim Keady, managing director and chief client officer at the DTCC, said in the statement. He added: “We will continue to engage with clients, regulators and the industry on our approach to data products.” Advertisement - Scroll to Continue DTCC President Frank La Salla spoke to a group of traders on Tuesday to notify them about the suspension, in what the traders saw as an attempt to establish better communications with institutional investment firms, a person familiar with the matter said. The suspension doesn’t affect Equity Kinetics, the other data feed featured in Themis’s report. Unlike Investor Kinetics, Equity Kinetics doesn’t produce granular stock-by-stock data. Still, traders had voiced concerns that the two data feeds used together, and in conjunction with other data sources, could expose their stock trades. “We’re glad to see that DTCC suspended the Investor Kinetics product,” said Joe Saluzzi, a partner at New Jersey-based Themis and co-author of the report. “However, DTCC sells other products that provide sensitive client data and Themis believes that the central clearinghouse should not be in the data-selling business at all. Investors have no choice but to clear their trades through, and entrust their data to, DTCC. This trust has been violated,” Saluzzi added. Keady said: “The protection of data entrusted to DTCC is of paramount importance to us, and it is false to claim that DTCC Kinetics products include sensitive client data.” Last week, a group representing institutional investors urged the Securities and Exchange Commission to investigate DTCC’s data feeds. “We worry that equities trade-related information sold by DTCC may be used by sophisticated market participants to effectively front-run large orders to the detriment of public pension funds, endowments, mutual-fund investors, and other market participants,” the group, Healthy Markets Association, said in the May 30 letter to SEC Chair Gary Gensler.
Great way to advertise Investor Kinetics and Equity Kinetics' services! Now I am going to subscribe to their data feed and glean through their data to see how I can figure out when institutions are buying and selling. LOL
Our feeds were of no value whatsoever, which is why people paid for them! What a bunch of nonsense. I was I had the connections to start my own dtcc and exchange. All orders would execute every 5 min and must be valid for at least 10 min. Not settlement window. Instant settlement every 5 min. It would rip all these parasite middle out out the system.