Alternative Data News and Insight

We consider it critically important that regulated buyers monitor their data vendors on an ongoing basis. Anecdotally we have heard that the SEC takes this view, particularly with respect to tracking vendor litigation. Recently, a member of the SEC Examinations team expressed a similar opinion at Neudata’s Winter Summit. We believe that a shift to events-based diligence, rather than diligence solely around contract signatures and renewals, is necessary to mitigate risk in the current environment.

We were comforted to hear a perspective that we consider consistent with the buy-side community’s long-standing diligence and contracting practices for onboarding alternative data. 

Yes, vendors are just beginning to feel the impact of the new law, which requires coordination with and disclosures to local government (anecdotally, the Ministry of Industry and Information Technology). 

Despite widespread enthusiasm for transparency and compliance in 2021, some popular vendors are still keeping their cards close to their vests.

Compliance trends in 2021 proved that the landscape remains uncertain, demanding more attention during the onboarding and maintenance phases.

While buyers are not necessarily obligated to exercise every conceivable measure to investigate a vendor’s practices, there are tactics outside of calls and questionnaires for vetting a data source.

The App Annie settlement was no doubt a shock, but we prefer to take a measured view of its impact and pragmatic significance for data buyers. For now, we believe (based on the SEC’s statements) that the settlement reflects outlier vendor behavior, since remedied, and in fact supports the diligence and contracting measures long practiced by sophisticated buyers.

China is very much in focus again this month as buyers react to the recent enforcement activity of the Cyberspace Administration and Ministry of Industry and Information Technology.

The widespread practice of forming customer profiles represents an enormous potential market for alternative data, but also presents new compliance challenges deeply rooted in privacy that may hinder conventional buysiders and corporates alike.

We are concerned that the answer may now be "yes," given the recent spike in data localisation actions this summer.