EC Looks Into Thomson Reuters Licensing of Financial ID Codes
October 7, 2009
Is the European Commission investigating Thomson Reuters licensing policy for financial identification codes?
That’s what several senior ranking operations executives with companies that are customers of Thomson Reuters seem to think. These executives of custodian banks based in the United Kingdom said that the European Commission last month sent out a questionnaire to continental European banks about the licensing fees and usage of Thomson Reuters’ Reuters Instrument Codes (RICs).
The EC’s main press office forwarded a call from Securities Industry News to Jonathan Todd, a spokesman for European Competition Commissioner Neelie Kroes. Todd did not respond by press time to Securities Industry News’ emailed questions seeking comment.
In response to a set of written questions posed by Securities Industry News, Fleur Sohtz, a London-based public relations director for Thomson Reuters, said that her firm could not comment because “Thomson Reuters has not been approached by the EC regarding its licensing of RICs. She added that Thomson Reuters would be “happy to answer any questions they [the EC] have about RICs.’
Data vendors often use proprietary codes as well as third-party codes from national numbering agencies to identify financial instruments. RICs are ticker-like codes used by Thomson Reuters to identify equities, stock indices and commodity futures. The codes are used by Thomson Reuters’ customers to look up information on Thomson Reuters datafeeds.
“Thomson Reuters does not sell RICs; we provide financial information services which included embedded RIC navigation as an integral part of those services,” said Sohtz. “Thomson Reuters services also support other international numbering agencies codes and other third party codes to the extent they are part of services that we distribute on behalf of the relevant third parties.”
For equities, the RIC code is comprised of a RIC root – one to four characters – A through Z) followed by a dot and one or two character (A through Z) code denoting which exchange the instrument was traded on.
The exchange code used in the RIC is proprietary to Thomson Reuters. Case in point: WMT.N means shares of Wal-Mart traded on the New York Stock Exchange (N). Examples of indexes which have RIC codes are-- .DJI for Dow Jones Industrial Average and SPX for S&P 500.
Although it could not be confirmed just why the EC is looking into Thomson Reuters’ licensing policies for RIC codes, its tack closely matches that taken with the CUSIP Service Bureau, North America’s numbering agency.
In January, the EC said it was investigating the CUSIP Service Bureau for potentially abusing its role as the issuer of international identification codes for North American securities. That would mean that Standard & Poor's, which operates the bureau, could be inappropriately forcing European firms to pay for access to identification codes.
The EC’s investigation into the CUSIP Service Bureau also involved sending a questionnaire to European financial firms which lobbied the EC to take action against the CUSIP Service Bureau on the grounds they should not have to pay for access to the financial instrument codes.
At the heart of the CUSIP Service Bureau’s case is whether financial instrument identification codes are considered standards and should be distributed for free. The EC has yet to rule on the matter and a spokesman for S&P declined to comment on the Thomson Reuters case.
