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Sources say NYSE Euronext will bundle Wombat's data feeds with the exchange's own data. "One plausible scenario is that the NYSE will offer a consolidated cash-equity feed with BATS ECN and Direct Edge, giving customers the ability to pick and choose the data they want," says John Panzica, general manager of Reliance Globecom, a U.S. Ethernet provider that was acquired by Mumbai-based Reliance Communications. "That becomes a one-of-a-kind service offering from an exchange." Panzica notes that such a product would compete with offerings from Activ Financial, Trading Technologies and Reuters-Thomson. Reliance Globecom provides bandwidth for the NYSE and London Stock Exchange, which use Reliance's global extranet to distribute market data to 350 financial services firms.
NYSE Euronext also could use Wombat to speed up its market data delivery, according to David Easthope, senior analyst at Celent, an Oliver-Wyman company. "If you were to create an environment for algorithmic trading and statistical arbitrage, you don't [only] need a fast trading system, you also need fast market data," he says.
To increase data revenues, both NYSE Euronext and Nasdaq OMX are keen to sell their data overseas. While Nasdaq doesn't focus on customers outside the U.S. today, says Adena Friedman, a Nasdaq OMX EVP, "We're going to bring our data over OMX's distribution network so customers in Europe can get it as they're accustomed to receiving it." On the flip side, Nasdaq will sell OMX data through its distribution network and sales channel in the U.S., she adds.
Through Nasdaq's relationship with markets that license OMX's trading platforms, Friedman also sees opportunities to work with other exchange clients as a third-party distributor of data. She says there is interest from all the exchanges in Asia to improve distribution of their data in Europe and the U.S.
NYSE Euronext also is interested in helping other markets distribute their data. Wombat already has built more than 100 market data interfaces, notes Sam Johnson, EVP and CEO of NYSE Transact Tools, the technology arm of NYSE Euronext.
