NEW YORK, April 29 (Reuters) - PR Newswire will require customers that receive direct feeds of its market-moving releases to certify they will not engage in high-frequency trading on the information, New York Attorney General Eric Schneiderman said late Tuesday.
Schneiderman has been conducting a sweeping investigation of Wall Street practices that provide elite groups of traders with early access to information. He says early access, even by milliseconds, gives the high-tech traders unfair advantages.
Marketwired and Berkshire Hathaway Inc’s Business Wire, which also distribute news releases, agreed to stop providing direct feeds to high-frequency traders earlier this year.
PR Newswire has never supplied its direct data feed to high frequency trading firms, a company spokesman said.
PR Newswire agreed to the new requirements for those who receive direct data feeds and also said it would tell clients releasing information upon the close of the markets to do so at 4:01 p.m.
Some exchanges, including the Nasdaq, allow trading “for milliseconds” beyond the 4 p.m. closing time, so the traders can sometimes exploit close-of-market releases, the attorney general’s office said.
PR Newswire is “going the extra mile to ensure its service is not abused by high frequency traders,” Schneiderman said in a statement.
PR Newswire’s new practices solidify the company’s “position promoting fair access to market-moving information,” the company’s chief executive, Ninan Chacko, said in a statement.
The attorney general also has begun meeting with exchanges and alternative trading venues, known as dark pools, to discuss reforms.
Earlier this month, he sent subpoenas to at least six high frequency trading firms seeking information on their relationships with exchanges.
He also has scrutinized the early release of analyst and consumer sentiment data.
Reporting By Karen Freifeld; Editing by Steve Orlofsky