FERC Filings
Motion for Clarification of the Electric Power Supply Association re: Price Discovery in Natural Gas and Electric Markets
The Commission Should Clarify The Relationship Between Data Providers and Index Developers
To qualify for safe harbor protection, data providers must report certain information to index developers. This requirement raises its own issues and the Commission needs to clarify the requirement for reporting “all” trades and to whom. If data providers have to report all trades to all index developers, including anyone who chooses to designate themself as an index developer, at numerous different points and in multiple formats, the effect could be extremely burdensome, and the results could be counterproductive.
Under the Policy Statement, however, it is not clear what the limits of the reporting requirement are. For example, can a data provider obtain safe harbor protection if it chooses to report all its trades to a single index developer, even if the data provider trades at a location that the index developer doesn’t include? What if the data providers report information at one location to one index developer and information at another location to another index developer?
In addition, the potential exists for new index developers to emerge seeking data at additional points that they select. There is a very real risk that niche publications might seek information from data providers at very specific and thinly traded locations. Would failure to work with a start-up company seeking information in an illiquid location preclude data providers from safe harbor protections?
Again, this is an issue that requires Commission guidance and should not be left for resolution between data providers and index developers who, for obvious reasons, might view this issue differently.