text: The reason for this is mostly due to a lack of awareness. They are out of the direct line of sight of the data sources, and their contracts with the primary vendors reflect that relationship rather than the one with the exchanges.
  This introduces new issues where contracts between third parties are at variance with the policies and licences employed by exchanges.
  Just as traditional market data vendors know and mostly play by rules, so do the larger Banks who have up until now been the backbone of the market data consumer world.
  But that world is changing. Like in the vendor and facilitator space there is fragmentation, with new players coming in using data in difference ways, but also the smaller financial institutions and players in secondary markets are being captured within the IPR and licence web.
  For smaller organisations, they face the same issues as their larger brethren, though less likely to have the number of legacy systems or global sprawl.
  There is no doubt that for a multiplicity of reasons the need for IPR and licence management is an important requirement, and failing to meet the need opens the door to costly liabilities.
  Even smaller institutions can face audit liabilities ranging from US$5 Million to US$10 Million dollars, and that is per exchange, not an absolute figure.
  Albert Einstein reportedly defined insanity as “Doing the same thing over and over again and expecting different results.”
  Exchanges repeat their audits and often get the same results, proving Einstein right, it is perhaps the financial institutions who are insane for letting them achieve the same results.
  To summarise, it is not all doom and gloom for the future. Issues can be solved once identified, even if some of these issues are new in nature and involve parties temperamentally antagonistic towards traditional IPR structures.
  Uncontrolled out of licence market data usage by new types of vendors who see licences as a business constraint, plus an unnecessary cost.
  Managing market data in a fragmented environment with omni-directional distribution will be a technical and administrative challenge, even if new clients and users are co-operative.
  Increased pressure on time and resources. The smaller the organisation the less access to expertise and management. As these firms ingest greater quantities of market data usage they increase the likelihood of out-of-contract usage through not having proper processes in place.
  Lack of expertise in smaller organisations. The licence net is enlarging and capturing ever more financial institutions, ancillary players and others in its tight mesh net.
  Increased documentation and paperwork. As exchanges increase their offerings, identify new ways to licence usage and expand their client universe this creates additional workload for the clients.
  It also creates additional paperwork for the exchanges as well, and they are already slow in responses now.
  Banks will see the issues for what they are, though more pro-active management policies are more likely to come from Risk, Compliance and Internal Audit teams than IT or Central Procurement.
  Standardised terms. Exchanges should at least agree on industry standards for terms such as ‘derived data’, and ‘non-display usage’.
  Exchanges and Data Sources need to differentiate between the types of consumer, too often they treat vendors and other facilitators like Banks in contractual terms.
  Audits must be fair, based upon the original rationale of policing and protecting IPRs, not as revenue generation
  Better communication. Knowing IPRs means informing clients in plain, understandable English, and any other language that i