NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announced an agreement on Wednesday with a news distribution and reporting firm to ensure its direct data feed recipients certify they will not engage in high-frequency trading.
PR Newswire previously declined to provide its primary direct data feed to high-frequency traders, but the agreement turns the practice into a formal policy at the company. The agreement also requires PR Newswire's customers to annually certify that the direct data feeds they receive will not be used for high-frequency trading. The company also agreed to counsel its clients to release information upon the close of the market after 4:00 p.m. to ensure high-frequency traders cannot trade on the news in the milliseconds after the closing bell.
"By going the extra mile to ensure its service is not abused by high-frequency traders - at any time during the trading day and in the moments after the closing bell - PR Newswire has proven itself to be an industry leader," Schneiderman said.
"High-frequency traders can use information in the milliseconds before it becomes widely available to other investors, effectively skimming from the rest of the investing public. Today's agreement is another important step toward curbing Insider Trading 2.0, and PR Newswire deserves credit for its leadership."
The agreement follows earlier agreements between Schneiderman and Business Wire and Marketwired. The agreements are part of Schneiderman's efforts to end Insider Trading 2.0, the practice of providing preferred, technologically sophisticated traders with early access to market-moving information.