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September 13, 2012

Tradeworx Wins SEC Data Contract

By John D'Antona Jr.

The Securities and Exchange Commission awarded high-frequency trading firm Tradeworx with a contract to provide a real-time data service that would provide last sale and quote information for equities and options.

The data is intended to better help the SEC to surveil and analyze markets. The deal comes on the heels of the SEC's decision to build a consolidated audit trail that will track stock and options orders. The data service is expected to complement the CAT

The SEC currently does not have real-time data feeds at the moment. The cost will be $2.5 million a year for the first year, according to the SEC, and is based on Tradeworx proprietary technology. Manoj Narang, the chief executive officer of Tradeworx, said he is making his technology available to the regulators so as to give them equal footing data-wise with traders.

"In my mind, it would inspire much more investor confidence in the market if the SEC could reach its own conclusions about how the market functions without having to rely on outside opinions, which tend to be highly motivated by self-interest," Narang said.

The SEC voted on July 11 to approve a rule requiring the exchanges and the Financial Industry Regulatory Authority to build the CAT. However, the SEC said the system doesn't have to provide data in real time.

Data will be sourced from all U.S. stock exchanges and the Options Price Reporting Authority.

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