An article relating to this blog post on Finextra:
MiFID and Reg NMS to drive market data volumes - study
The introduction of the EU Markets in Financial Instruments Directive (MiFID) and the US Regulation National Market System (Reg NMS) could cause a 900% increase in the amount of market data being publ...
See article
Following on from Chris Pickle's response
to the recent TowerGroup study on regulation-driven market data volume growth, it was interesting to note
Datamonitor's similar report being published this week.
It refers to market data volumes doubling annually (which is something that is apparently happening already without MiFID and Reg NMS). And it says that total front office market data infrastructure spend across European and US buy side and sell side firms
will increase by 13.52% from $2.1 billion today to $2.384 billion "by 2009" (or end of 2008, if you prefer).
If Chris' and Tower's regulation-driven volume growth predictions are on the right track (Chris says 400% by end 2008, and Tower says 900% by the start of 2010) this doesn't actually seem like a huge increase in IT spending - especially considering the strain
that the volumes and other regulatory requirements will put on existing infrastructure.
Storage, archiving, trade reconstitution and analysis are all areas that both Datamonitor and Tower say market participants will have to invest in. And if you add to this the trend towards cross-asset data aggregation and analysis to feed algorithmic trading,
I wouldn't mind betting that the actual increase in front-office infrastructure spending ends up being more than Datamonitor's estimate.