Latency, fiber optics, co-location, laser beams, front-running trades, exploiting milliseconds. Phew. This is the stuff of High Frequency Trading. And MOST of it is out of IR’s control.
While the SEC is trying to get a handle on all the technology (and legalities) behind algorithmic trading, as you read yesterday, we’ve worked out a very practical and tactical step to help squelch the aspects of HFT that news distribution can effect.
Below is our news release that we sent out in unison with New York Attorney General Schneiderman’s.
Per AG Schneiderman: “… PR Newswire deserves credit for its leadership.”
FOR IMMEDIATE RELEASE:
PR Newswire Announces Industry-Leading Policies for Market-Moving News Distribution
Expanding on its long-standing approach in support of fair and equitable news distribution, PR Newswire is taking additional measures to protect client and market interests.
NEW YORK, April 30, 2014 /PRNewswire/ — Today PR Newswire announces that it has established an enhanced set of policies for the issuance and distribution of market-moving news. The policies, which build on PR Newswire’s leadership in the field of fair and equitable news distribution, are designed to promote integrity in the market and prevent preferential access to material news by high-frequency trading (HFT) firms.
“PR Newswire has always taken a forward-thinking approach toward the most effective means of news dissemination,” said Ninan Chacko, CEO of PR Newswire. “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.”
As the pioneer of commercial news distribution, PR Newswire has consistently been the industry leader in establishing practices that support equitable access and synchronized news distribution. PR Newswire has never supplied its primary data feed to high-frequency traders.
PR Newswire’s newly formalized policy will require primary data feed recipients to certify that they do not engage in high-frequency trading. This more rigorous policy safeguards its primary data feed from being provided to entities engaged in HFT.
Another potential issue for companies and investors is the chance that trades will be processed in the seconds after official market close at major U.S. stock exchanges. This offers an opportunity for some high-frequency traders to receive news at 4PM and immediately trade on that news before it has been made available to the broader market.
Therefore, for clients seeking to distribute potentially market moving news at market close, PR Newswire’s first-in-the-industry policy will recommend holding distribution until 4:01 PM ET to prevent the possibility of same-day trading on major U.S. exchanges.
“We are pleased to announce a new policy for clients who distribute potentially market moving news for market close,” continued Chacko. “These clients will be counseled to hold their release until 4:01 PM ET to prevent trades on this news before the closing price is finalized.”
The formalization of these policy changes follows collaboration with the Office of New York Attorney General Eric Schneiderman. To learn more about the New York Attorney General’s efforts around fair and broad distribution of material news, please read today’s release.
About PR Newswire
PR Newswire (www.prnewswire.com) is the premier global provider of multimedia platforms that enable marketers, corporate communicators, sustainability officers, public affairs and investor relations officers to leverage content to engage with all their key audiences. Having pioneered the commercial news distribution industry 60 years ago, PR Newswire today provides end-to-end solutions to produce, optimize and target content — from rich media to online video to multimedia — and then distribute content and measure results across traditional, digital, mobile and social channels. Combining the world’s largest multi-channel, multi-cultural content distribution and optimization network with comprehensive workflow tools and platforms, PR Newswire enables the world’s enterprises to engage opportunity everywhere it exists. PR Newswire serves tens of thousands of clients from offices in the Americas, Europe, Middle East, Africa and the Asia-Pacific region, and is a UBM plc company.
Manager, Marketing Communication