Monday, November 8, 2010

Data News #2010 - 31
NASDAQ OMX to Create a Direct Relationship with Firms for Delivery of Index Weightings Data, Effective April 4, 2011

How is NASDAQ OMX modifying its policy related to index weightings data?

In an effort to create a stronger, more direct relationship with firms using index weightings data, NASDAQ OMX is modifying its policy related to index weightings data delivery. NASDAQ OMX will adopt the industry standard of establishing and maintaining direct relationships with recipients of proprietary index weightings data. This change will help ensure that firms are part of the index content development process, enabling them to contribute suggested changes to the content and delivery of such information.

Over the next several years, the industry will also see an increase in the number and type of indexes from NASDAQ OMX. We are committed to delivering the most value to our constituents and help drive that value to our customers through our products. Although this change will help NASDAQ OMX adopt the industry standard, the increased number and type of global indexes will help customers see additional value in our offering.

Additionally, this change will simplify pricing and reporting requirements while also expanding available information through NASDAQ OMX Global Index Watch (GIW). Customers will be charged on a per firm basis, rather than per user, which allows unlimited distribution inside a firm (and affiliated firms) as well as eliminating per user reporting.

NASDAQ OMX is announcing this change now to give customers enough time to make any necessary changes or new arrangements to receive the data. With the five month lead time, NASDAQ OMX feels customers will have enough time to ask questions and make any necessary changes.

What is NASDAQ OMX index weightings data?

NASDAQ OMX index weightings data provides specific details related to the composition and construction of NASDAQ OMX proprietary indexes. Weightings information enables clients to identify securities within indexes, determine the importance of the security relevant to the overall index and easily track portfolio investments based on indexes. Clients can gauge the market’s performance and make educated buy and sell decisions - whether they are trading index-based funds or pursuing more advanced investment strategies related to the trading of securities underlying an index.

How will the GIDS data feed be impacted by this change?

GIDS, our premier index data feed service, offers real-time updates as well as daily summary information for the most widely followed indexes and Exchange-Traded Funds (ETFs) in the world. GIDS will continue to operate much as it does today with only minor processing changes related to the morning directory spins.

Effective Monday, April 4, 2011, NASDAQ OMX will make the following processing changes to the GIDS data feed:

• Directory Message (Category A – Type C) – NASDAQ OMX will no longer populate the Divisor or Start-of-Day Market Value fields within the morning directory message. As of April 4^th, these two fields will be zero-filled.
• Issue Symbol Participation Message (Category A – Type D) – NASDAQ OMX will no longer populate the Calculation Method and Index Shares fields within the issue symbol participation message. As of April 4^th, the Calculation Method field will be space-filled and the Index Shares field will be zero-filled.

How will the Nordic delivery services be impacted by this change?

The Nordic Equity TotalView entitlement will no longer carry index weightings information as of close of business Friday, April 1, 2011. In Genium Consolidated Feed (GCF) and FDS, the index weights data will only be available for customers that subscribe to the Nordic Index Weights product.

How will a firm be able to access index weightings data from NASDAQ OMX as of April 4, 2011?

NASDAQ OMX offers direct proprietary access to index weightings data via GIW, our premier web delivery service for weightings data.

GIW provides full access to NASDAQ OMX global index offerings via an easy-to-use web interface. In addition to providing weightings and component information for all NASDAQ OMX indexes, GIW also provides advance notifications of corporate actions and historical record of index values, composition, weighting and divisors. This allows firms to understand changes before they actually happen. Additionally, it reduces costs for customers as they do not have to store redundant data which is available on GIW.

Nordic Equity TotalView will continue to provide the list of securities in NASDAQ OMX indexes but will cease to carry weighting specific data fields. Nordic index weights will continue to be available via the Nordic Index Weights entitlement in FDS. Nordic index values and constituents will continue to be available in GCF and FDS for Nordic Equity TotalView customers.

If I receive my NASDAQ OMX weightings data from a data vendor today, will I still be able to get this after April 4, 2011?

Yes, in addition to the direct availability, NASDAQ OMX is working closely with the redistributors that provide this data content via their controlled terminals so that clients can continue to have a wide variety of delivery options. NASDAQ OMX will maintain a list of approved vendors that redistribute index data on the NASDAQ OMX Trader^® website. As we authorize additional redistributors, we will update this page to accurately reflect the vendors approved as resellers of NASDAQ OMX index weightings data via their controlled services.

How can I receive more information on how this change will impact my firm?

Clients are encouraged to contact their NASDAQ OMX Global Data Products Account Manager, to determine the best option for their firm and to receive additional information on subscribing to GIW. A Frequently Asked Questions document has been created to help customers understand more specifically how this change affects them. As additional details become available, NASDAQ OMX will provide updates via email alerts and the NASDAQ OMX Trader website.

Where can I find additional information?

• Refer to the Index Weightings Frequently Asked Questions document.
• Contact NASDAQ OMX Global Data Products at +1 301 978 5307 or + 45 33 93 33 66.