Insuring Market Data: A Modest Proposal?
An executive at the Bank of New York has posed the idea of creating insurance contracts to guarantee the quality of market data, now that greater emphasis and responsibility is being placed on accurate and timely data.
Companies in the outsourcing business can spend vast quantities of time on pricing on behalf of a client, says Matthew Cox, head of securities data management in London at Bank of New York. If an outsourcer gets that price wrong for whatever reason, the bank may have to reimburse the affected funds. "If the market data was insured, then you would be somewhat covered from the liability for paying out for errors," Cox says.
With insurance, it could be possible to obtain a premium in relation to
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