How To Reduce Oil Market Data Costs.
100% Success over 7 years, saving our clients millions!
Essential Oil Price Market Data
Market data is essential for physical commodity markets. Traders, brokers, transporters, financiers and consumers rely on this essential information to negotiate, transact, bill and account various activities, but this comes at huge expense to them.
how do we get a fair price?
It’s easy to blame market data vendors, publishers and exchanges, for high fees, but firms eventually have to realise if they want to reduce their data spend, they have to work with industry experts like Phycomex to help optimise, negotiate and manage their market data spend.
Complex data licensing and selling
Increasingly complex selling strategies from market data providers and new regulations such as Basel II make the need for controlling market data greater than ever before. This has resulted in a surge in data audits/ reviews from data providers making sure they get paid what they feel they are entitled to.
How is oil market data priced?
The cost of data may be based not only on specific feeds or data sets, but also the number of users who access the data, how and where the data is being used, through which systems, outputs/ delivery methods etc. There are also a number of black box methods used to calculate a form of enterprise license in the guise of being more transparent, aparently.
Phycomex helps reduce data costs
How Can We Help?
With the right knowledge and expertise on side it’s possible to save around 20 percent on market data/ licensing fees based on our experience. Many of the largest banks and trading firms already have experience in keeping tabs on their market data with technology tools, dedicated staff and, when needed, specialist consultants like Phycomex.
Many tier-one banks and Oil Majors also confirm that their organisations conduct periodic internal audits and rely on data management tools as well as market data management gurus like Phycomex to keep a check on unnecessary usage and avoid the “hidden” costs.
Complimentary insights
Our Services Are Complimentary If Your Data Fee is Not Reduced!
We help identify where you may be overcharged and map the steps to reduce costs.
Our tools help understand data flow within an organisation, assisting in optimising needs, but also to satisfy market data provider’s licensing terms.
Getting a handle on fee is just one part of the overall strategy. In addition, it’s critical to have ongoing controls in place to manage and monitor usage as companies and individual needs are ever changing, leaving this opens the doors to surprise audits and associated costs.
identify where you may be overcharged and how to make things fair
Market Data Compliance
Firms that break the terms of their contracts, even accidentally, can face hefty penalties and in some cases fines of up to $20Million for such negligence. Naturally, organisations complain they are being ruthlessly squeezed/ overcharged, in particular by those monopolistic data providers showing up with surprise audits at every renewal, resulting in higher costs.
Portugal’s investor advocacy group Associacao de Investidores (Association of Investors) refers to this as a “history of immoral fees” and wants the European Commission to ensure that the second version of the Markets in Financial Instruments Directive (MiFID) won’t allow European exchanges to make too much money. A copy of this campaign can be found at the Stop Market Data Fees website.
Unfortunately data providers are a lot better at stretching the definition of their terms than clients are at figuring out where they are being overcharged. This is where Phycomex can help bring transparency to those that provide market transparency.
Why You Need Phycomex
Because there is no single definition of market data or a standardised pricing model, it is difficult to estimate with any certainty just how much cost-cutting firms can do. Some data providers define market data as the price of an instrument or group of instruments, while others incorporate counterparties, reference data, volumes, indices, foreign exchange rates, and benchmarks.
When it comes to discussing the price, some only include the basic licensing fees for data feeds, while others add the costs of terminals, delivery, maintenance and other connecting applications. Often, beyond this there are also the “hidden” costs that somehow manage to surface every renewal. Regardless of how it is defined, market data is in the top five operating expenses for financial and trading firms.
Research indicates that financial firms typically spend anywhere from about US$1 million a year to as much as US$25 million a year in licensing fees alone. For commodity traders, the figure could be exponentially higher
