Thomson Reuters is to suspend a closely-watched data tool that tracks equities trading on exchanges and other venues globally, after issues with the accuracy of the product emerged last month.
It said it expected to a release a "new proprietary and equivalent capability" in the first quarter of 2015 and would communicate with its users in due course on the exact timeframe.
The service provides market share statistics from competing equity venues across Europe, North America and Asia-Pacific. It has a wide customer base and is often cited in journals, independent reports and by regulators, including the European Securities and Markets Authority. The data was used by a number of firms to support their responses to an Esma consultation on Mifid II that was held over the summer.
Thomson Reuters said in a statement to Financial News that the suspension was due to "issues with the data aggregation component feeding the EMSR product". The issue began on September 18, and Thomson Reuters was first made aware of it on October 6, a spokesman said.
The firm launched the EMSR after the EU's 2007 Markets in Financial Instruments Directive, which allowed alternative trading platforms known as multilateral trading facilities to rival incumbent exchanges. The service helped to track the steady decline in the market share of bourses such as the London Stock Exchange, Euronext and Deutsche Börse to rival venues such as Chi-X Europe, Bats Europe (now known as Bats Chi-X Europe following a 2011 merger), Turquoise, Nyfix and Nasdaq OMX Neuro.
It also tracks the share of trading taking place in dark pools, including those operated by exchanges, as well as broker-run venues, including Goldman's Sigma-X and UBS MTF.
The service collected data from so-called trade data monitors, a reporting mechanism created following the 2007 Mifid. However, it was hamstrung by a lack of clear standards around over-the-counter trades, according to industry experts.
This is not the first error for ESMR. In June 2009, an error in the reporting of OTC equity trades artificially inflated exchange group NYSE Euronext’s market share of trading stocks in the UK’s FTSE 100 index.
The figures showed that NYSE Euronext was responsible for more than 32% of trades in the FTSE100, overtaking the London Stock Exchange. However, the numbers included executions reported through the exchange's OTC reporting facilities, which were reported in pounds rather than pence, inflating them by 100 times, Thomson Reuters said at the time.
Since Thomson Reuters launched its EMSR service, other operators, including technology vendor Fidessa and Bats Chi-X Europe have come out with competing products.
Mark Hemsley, chief executive of Bats Chi-X Europe, said: "While it doesn’t inform routing decisions, EMSR was important for market participants in gauging market share across Europe’s many venues. Its suspension emphasises European investors of every sort need a consolidated tape of data from which definitive and comprehensive market share statistics can be drawn for both on exchange and OTC trading.”
Steve Grob, director of global strategy at Fidessa, said: "I'm surprised they've taken the decision they have, because we are seeing more and more demand for our service. Our users range from exchanges, consultants, academics, trade associations, sellside firms and the buyside to help them understand the market and validate trading decisions. It is hard to do, and we have spent a lot of time and money on our service."
Financial News is owned by Dow Jones & Company, which competes with Thomson Reuters on news and data products.
