Markets Converge – How Does This Affect the Collection of Market Data?

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Events this past week have solidified the fact that  exchanges across the globe will be moving towards convergence. The TMX Group and LSE Merger was announced last Wednesday, the  Deutsche Börse AG wants to merge with the NYSE Euronext ,  and there is the  ongoing attempted merger between the SGX and ASX.

Probably the biggest change from a commodities and futures standpoint is the proposed Deutsche Börse AG and NYSE Euronext merger which would create the biggest futures exchange in the world. Controlled by this new organization would be two of the world’s largest derivates exchanges; with Eurex and NYSE Euronext LIFFE under the same umbrella. With consolidation the name of the game, it is not surprising to hear that the CME Group and even ICE are showing an interest in getting involved with further mergers. So what does any of this mean for data?

If we continue to see so much convergence on the market front, how far away are we from the convergence of data itself? Why would so many futures contracts and commodities be traded at multiple exchanges when they can be traded at one, and if this happens, how will we track it? What changes? History has shown that in fact nothing and everything can change in the collection of data. When the CME purchased NYMEX, business changed in a few ways, but the data continued to flow to anyone and everyone. However, what we’re seeing in the markets is unprecedented, and due to our growing reliance on data, there is an implicit risk built into this activity.

At the end of the day, the convergence of the exchanges will lead to changes to data, or its structure, in some form or another sometime in the future; however, this doesn’t necessarily need to be a risk for you. In 2009 and in 2010 two electric independent system operators (ISO), CAISO and ERCOT, committed to significant changes to the structure of their market operation. This caused a tremendous change in both the format of data provided, and also in the amount that was being published. ZEMA, by ZE, took the necessary steps to monitor and prepare for the change, as it does with all the data sources it manages for its clients. By keeping up with the data sources, ZEMA was set up well in advance for all the major changes the ISOs had done to ensure there were no interruption or latency issues for ZEMA clients.

All you need to know is that Data Management Systems, like ZEMA can help by not only taking away the risk with collecting timely data, but also  the stress of ever having to worry about the quality of this data. ZEMA has been actively engaged with tracking the many major changes that occurred with data providers over the last few years such as the above mentioned case of CAISO MRTU and ERCOT Nodal Market. With ZEMA you never need to worry about the management or quality of your data again.

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