Ten minutes of silence on LiveSquawk, the audio news provider, was punctuated at 12:13pm on Friday when a man with a flat English accent announced: “Just be aware that President Trump has just started tweeting today.”
The tweets turned out not to be market-moving; the US president had taken to his favourite medium to complain about his treatment by the magazine Christianity Today.
But other snippets broadcasted by LiveSquawk during the day included daily fixes on the Libor lending rate or the overnight repo rate — useful titbits for professional traders.
This type of audio and video service, run by companies such as RanSquawk and LiveSquawk, has been a familiar feature in professional finance for several years. But it has been thrust into the full glare this week after The Times reported that some traders had been listening in to illicit back-up feeds of several Bank of England press conferences, without the central bank’s knowledge.
The BoE has not named the news service in question, but a person briefed on regulatory inquiries said east London-based Statisma News, which has boasted of its ability to stream comments from the BoE and other central banks “first”, is a focus of inquiries. The little-known company, whose registered address is at a small accountancy firm next to a Chinese takeaway and the Crispy Cod chip shop in Hornchurch, has denied that it distributes any non-public information.
Central to the problem is that the BoE says a “third party” had allegedly been pumping out an audio stream intended only as a back-up to the bank’s main video feed, meaning listeners received governor Mark Carney’s words up to eight seconds faster than the TV.
The bank has declined to say whether its contract with the supplier contained any explicit provision prohibiting the feed being made available in this way.
LiveSquawk could not be reached for comment on the matter. Alec Baughan, business development analyst at RanSquawk, denied his company had access to any illicit feeds from the BoE. “It is not our mission to beat . . . ‘algos’,” he said.
For the companies producing the content the aim is to distribute public-domain information — snippets that help traders decide what to buy or sell. Users say it recreates the “hoot and holler” system of shouted messages relayed through small speakers on banks’ trading desks.
These services exploit the differing transmission times between audio and video, and between radio and the internet. Closed TV circuits, such as the one between Bloomberg and the distinctive BT TV tower in central London, are quicker than feeds on the web; on the internet audio files are smaller than webcasts and so faster to distribute. Webcasts can lag 30 seconds behind live action.
“If you were to watch [Mr] Carney on TV, you are going to try and hear what he said as quickly as possible to get an edge. All traders know that if you have a CNBC screen, Bloomberg TV and, say, BBC, you figure out which is fastest and watch that one,” said a person working in the audio news business in the UK. “It was a “big surprise” to hear there is a back-up audio feed from the BoE. “We didn’t know about it,” he added.
RanSquawk charges £300 a month per user to receive audio feeds and text headlines in real time. Broadcasts of press conferences cost more. One trader the FT spoke to was offered superfast access by an unidentified provider to audio feeds from central bank meetings for £4,000-£5,000 a month.
Statisma streams political and economic speeches from central banks, Westminster or Brussels. It said it does not “hack” or “eavesdrop” broadcast public events but releases information that it says has been made available to the public. The directors of Statisma could not be reached for further comment.
Getting the information first makes a difference. At Donald Trump’s speech at the Economic Club of New York on November 12, which Statisma News invited users to hear on its platform, Mr Trump generated a rapid-fire market response.
After 43 minutes, he signalled that a preliminary trade deal between the US and China “could happen soon”. The dollar index, which is used to measure the value of the dollar against a basket of six world currencies, climbed six points to 98.34.
Statisma was born out of Encoded Media, a UK streaming media technology group. It is run by Tom Sillence and Philip Wand, who also act as directors of Encoded. Mr Sillence and Mr Wand were also both directors in another Essex company called Microlatency, which specialised in “ultra low latency delivery of key live events” until it was wound up in January. One shareholder in Microlatency was LiveSquawk Holdings International. Encoded and Statisma share the same registered address in Hornchurch.
An employee of the Hornchurch accountancy firm told a visiting FT reporter that she had never heard of Statisma as her firm provided accountancy services for thousands of companies, and she was unaware of the news about the BoE’s audio feeds being supplied early to some traders.
Additional reporting by Anna Gross and Delphine Strauss