What Is a Market Data Display Agreement
A market data display agreement (MDDA) is a legal document that outlines the terms and conditions governing the display and distribution of market data to users. Market data refers to information about securities prices, trades, volumes, and other market statistics.
An MDDA typically governs the use of market data by vendors, brokers, and other intermediaries who display market data to their clients. These intermediaries may use the market data to create charts, graphs, and other visual displays that help clients make informed trading decisions.
MDDAs are important because they protect the intellectual property rights of market data providers, such as stock exchanges and other financial information vendors. These providers invest significant resources in collecting, processing, and disseminating market data, and they rely on the revenue generated from licensing their data to intermediaries.
Under an MDDA, intermediaries agree to adhere to certain rules and standards when displaying market data. These rules may include requirements for displaying accurate and up-to-date data, maintaining the security and confidentiality of the data, and obtaining proper licenses and permissions.
MDDAs may also include provisions for fees and royalties paid by intermediaries to market data providers. The fees may be based on the volume of data used, the frequency of data access, or other factors.
In addition to protecting the intellectual property rights of market data providers, MDDAs also help ensure the integrity and accuracy of the market data displayed to clients. This is important because inaccurate or misleading data could lead to poor trading decisions and financial losses for clients.
Overall, market data display agreements are an essential component of the financial industry ecosystem. By providing a legal framework for the distribution and display of market data, MDDAs help ensure that market participants have access to accurate, timely, and trustworthy market information.