29 September 2016
Business Intelligence: A Tech Revolution for the Evolution in Compliance

S&P attacked over Cusip fees

12 November 2010  |  11762 views  |  1 ticker 1

Three influential US trade bodies have called on the Securities and Exchange Commission to crack down on the fees charged for securities identifiers by Standard & Poor's.

In a joint letter to the US markets watchdog, the Bond Dealers of America, the Investment Adviser Association and the Government Finance Officers Association, argue that the licensing fees charged for Cusip reference data by S&P are "unreasonable and unwarranted".

They claim that charges ranging from $10,000 to hundreds of thousands dollars per year are passed on by the Cusip Service Bureau (CSB) without "any transparency, accountability or oversight".

"Cusip identifiers, once an industry utility, are a critically important means of identifying individual securities," says Mike Nicholas, chief executive officer of the BDA. "However, the CSB's insistence on charging rapidly increasing and non-transparent fees is having a chilling effect on market transparency and the free flow of information for investing, trading, accounting risk management and regulatory reporting."

The European Commission has already opened a probe into the pricing structures applied for proprietary entity codes by S&P and Thomson Reuters. The EC's objections followed a decision by Bloomberg in November last year to make its own proprietary symbology available for free to developers and market practitioners.

In the US, trade bodies contend that S&P has been ratcheting up fee structures for Cusip data, which is often mandated by the SEC for use in regulatory reporting.

"Where the use of a Cusip identifier is mandated by the SEC or a self regulatory organisation, it is inappropriate for S&P or the CSB to require payments," notes Nicholas. "A securities identifier is a fundamental part of the transaction side of the business. This steadily increasing fee ultimately increases the costs for individual investors."

In conclusion, the BDA, the IAA and the GFOA "strongly recommend the SEC follow the EC's example and investigate S&P's practices in the US".

Comments: (1)

Elizabeth Lumley
Elizabeth Lumley - Rainmaking Innovation - London | 12 November, 2010, 10:37

There are three things you can count on in life: death, taxes, and an annual row over CUSIP fees!

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Nyse Euronext and Bloomberg promote open standard for securities codes

Nyse Euronext and Bloomberg promote open standard for securities codes

18 March 2010  |  10565 views  |  0 comments
European Commission accuses S&P of monopoly abuse over Isin fees

European Commission accuses S&P of monopoly abuse over Isin fees

19 November 2009  |  13108 views  |  0 comments
Europe opens anti-trust probe into Reuters Instrument Codes

Europe opens anti-trust probe into Reuters Instrument Codes

10 November 2009  |  7278 views  |  0 comments
Bloomberg smashes proprietary identifier market

Bloomberg smashes proprietary identifier market

04 November 2009  |  14391 views  |  1 comments
Avox sets up wiki for business entity identifiers

Avox sets up wiki for business entity identifiers

22 June 2009  |  4202 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
Find out moreVisit equens.com

Who is commenting?

Top topics

Most viewed Most shared
RBS tests demonstrate ability of Ethereum to support a national domestic payments systemRBS tests demonstrate ability of Ethereum...
14454 views comments | 55 tweets | 48 linkedin
Ripple rudely gatecrashes Sibos partyRipple rudely gatecrashes Sibos party
9544 views comments | 30 tweets | 29 linkedin
Swift beware: Ripple signs banks to global payments steering groupSwift beware: Ripple signs banks to global...
9126 views comments | 33 tweets | 18 linkedin
BNP Paribas is working with clients on blockchain deploymentBNP Paribas is working with clients on blo...
7453 views comments | 14 tweets | 30 linkedin
US gets same day ACHUS gets same day ACH
7003 views comments | 23 tweets | 20 linkedin

Featured job

Find your next job