The U.K.'s Financial Conduct Authority is looking into the costs and competitiveness of market data in response to concerns from market users, the regulator said Tuesday.
The FCA plans two studies to address those concerns, including how benchmarks, indexes and credit ratings data are priced, ownership of information and access to alternative providers, the FCA said.
"In response to a call for input, the FCA heard concerns that limited competition in the markets for benchmarks and indices, credit ratings and trading data may increase costs for investors and affect investment choices," the FCA said on its website.
The first study is set to begin this summer and will look into complaints that complex contracts for benchmarks and indexes used by market participants to track prices and performance currently prevent switching to cheaper, better quality or more innovative alternative providers.
The second market study is scheduled to be launched later in 2021 and will assess whether high charges for access to credit ratings data is adding costs to investors and limiting new market entrants. "Access to high-quality credit ratings helps investment managers assess financial risk, influencing which investments they make," the FCA said.
The regulator also plans to gather more information on competition for wholesale trading data. "Concerns have been raised that limited competition may increase costs and have an impact on the types of assets that investment managers buy and sell," the FCA said.