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151
.1
Datastream
International
Inc
Datastream
International
Inc
Datastreaiu
RESPONSE
DIVISION
OF THE OFFICE
OF INVESTMENT
International Limited
File Nos
801-24551
801-41452 801-24281
OF CHIEF COUNSEL
MANAGEMENT
and March 12 1993 request
Your letters of January 18 1993
action to
enforcement
our assurance that we would not recommend
registrants
the Commission if each of the abovecaptioned
collectively Datastream withdraws its registration as an
Advisers Act of 1940
the
investment adviser under the Investment
Advisers
Act
and financial
You state that Datastream provides economic
industries
to the securities and financial
information services
databases
Datastreams
series
of
linked
worldwide
through
customers principally investment managers and institutional
investors pay fixed subscription fees quarterly in advance
online services they receive
Datastream
based on the specific
software packages
that contain
also provides to subscribers
tools that enable customers to retrieve data series from
analytic
graphics
the databases and manipulate the data to produce
and
other
Customers
time
series
analysis
analyses
statistics
calculations
various
tools
to
the
perform
can use
analytic
to complex algebraic equations
ranging from simple arithmetic
Section
202a 11
of
the
Advisers
Act
defines
an
investment adviser as any person who for compensation engages
in the business of advising
others either directly or through
or writings as to the value of securities or .who
publications
issues or
and as part of
regular business
for compensation
securities
The staff
or
concerning
reports
analyses
promulgates
securities
data
or
the
of
presentation
the
that
takes
position
does
not
constitute
furnishing
subscribers
to
information
investment advice or an analysis or report within the meaning of
the information is readily available
if
Section 202a
the categories
of information
in
its
raw
state
to the public
is
and
the
information
selective
not
are
highly
presented
the
in
which
manner
suggests
not organized or presented
holding or sale of any security or securities
purchase
11
1/
UniVu System pub avail Dec
EJV Partners
Inc pub avail
Media
General
Financial
Services
1992
Inc pub
Investex
Investment
Exchange
July 20 1992
Inc pub
Charles
Street
Securities
avail April
1990
Inc
Butcher
avail Feb 27 1987
Singer
pub avail
avail
Wallace
Lin
Jan
pub
April 15 1985
1987
L.P
See
Jack
Sonner
pub avail Mar 11 1983
You state that the information in Datastreams
databases
is
in its raw state
Datastream
collects
the
readily available
information from wire services
international
agencies
government
departments stock options and futures exchanges
brokers dealers banks issuers and other information vendors
An institutional investor or
money manager theoretically
could contract
with each of Datastreams
sources to obtain the
information in Datastreams
databases
You state however that
the proliferation of economic
and financial data now relevant to
investment decisions
has made it impracticable
if not
impossible for investment decisionmakers to access sufficient
raw data directly
You also state that the categories
of information made
available to Datastreains
subscribers
are not highly selective
Datastream
collects
over 720 million data items including
approximately
2000 market indices from 20 different countries
850
international
interest rates and 1600 international
end
ofday currency exchange rates
In addition
Datastream
includes
data relating
to 30000 stocks
and 44000 bond issues in its
databases
Datastreams objective is to furnish subscribers
with
database that is as comprehensive
as possible
and there is no
restriction
on the data that is collected
and made available
to
the subscribers
In addition
you state that the information in the databases
and the software packages
is not organized or presented
in
manner which
suggests the purchase
holding or sale of any
Datastreams
customers select the
security or securities
criteria for retrieving
data series from the databases and the
tools that will be used to manipulate that data and
analytic
data delivery
is not timed to any specific
market activity
Datastream and its affiliates
have no direct or indirect
financial
interest
in whether
subscriber uses Datastream data
and analytic
tools to purchase
sell or hold
particular
security
addition to providing noaction assurance as previously
the staff has given noaction assurance to providers
of various
computer software services
and
offering calculations
In not requiring these providers to register as
pricing models
investment advisers the staff considered
number of factors
of the users the degree to which
including the sophistication
the users themselves
perform the calculations the degree to
which the product is prepackaged
and not personalized
for each
and
whether
the
calculations
or models are based on
customer
In
discussed
These factors are
or standard calculations
traditional
software
services
whether computer
relevant in determining
users own
tools to facilitate
function merely as mathematical
of
efforts or whether they involve the recommendation
analyttcal
tools in some cases
You state that the analytic
securities
that
are already in the
mathematical
formulae
are standardized
tools
considered
the
are
in
other
cases
public domain
intellectual
by patent
or
property
protected
proprietary products
attach
does
not
that
Datastream
any
You
represent
or copyright
that
You
further
to
its
data
represent
value judgment
and is not
as
software is licensed
package
Datastreams
Datastreams
interests
of
user
the
any
personal
tailored to
the various
who
users
may
arrange
subscribers
are sophisticated
in
elements
package
to
suit their particular
needs
Co Ltd
you state that Nomura Securities
with
contracted
has
firm
brokerage
Japanese
to
available
exclusively
data
to
make
Datastream
Nomuragenerated
at
Datastream
subscribers
who
also
are
customers
Nomura brokerage
similar arrangement with
Datastream has
no extra cost ../
which has contracted
British
firm
brokerage
Hoare Govette
data available
make
Hoare
to
Govettegenerated
with Datastream
in the
customers
Govette
brokerage
to other Hoare
exclusively
Datastream
book
by
published
hard-copy
quarterly
form of
Datastream has no control over the Nomura and Hoare Govette
that Datastream will act merely
You represent
data j/
generated
firms
conduit
between these brokerage
communications
as
passive
and their customers 5/
In
addition
Nomura
LI
UniVu System pub avail Dec
Partners
Inc pub avail Dec
Executive
Asset
Management
1992
Associates
Wilson
pub avail May 25 1988
15 1988
Inc
Research
Dec 26 1985 Innosearch
Computer Language
Associates
Ltd pub avail
Corp Sept 12 1985 Syrus
L.P
EJV
Oct
23
1981
cannot
Datastreams U.S subscribers
You represent
tlxat
data
Datastreams
the Nomuragenerated
through
access
technical
facilities and therefore Nomuras use of
investment advice to some
services
to provide
Datastreams
subscribers
does not subject Nomura
nonU.S
of Datastreams
Act
Advisers
under the
to regulation
4j
USA
that ABN-AMRO Securities
Inc
You represent
issues this book in the
investment adviser
registered
United States through its Hoare Govette division
Partners L.P UniVu System pub avail Dec
1992 customers transmit their own proprietary products
information on
such as financial models research reports
See EJV
continued..
On the
basis of
the
facts
and
in your
representations
with
agreeing
your legal
enforcement
action
to the
Commission if Datastreain withdraws
its registration
as an
investment adviser
Because
is based on the facts
our position
and representations
in your letters you should
note that
different facts or representations may require
different
conclusion
Further this response expresses the Divisions
on enforcement
action
position
only and does not purport to
conclusions
express any legal
on the issues presented
letters and without necessarily
analysts we would not recommend
LJohn
Carter
Attorney
/. .continued
bond
indexes and securities information directed at
dealers to other customers through the UniVus Private
Reuters Information Services
Pages service
Inc
pub
avail
Jan
17
1991
video information
marketed to institutional investors
services
by financial
firms
featuring
network
presentations
El
izobeth
Nor1.Jorth
ELIZABETH
NORSWOFTHY ESQ
6g
K40WAY
STREET
uenreiJ MASAGHU6SQ2Q56
--50-5207101
FAX 508-520-7599
Seion
Rul
1993
ublie
\I
LThllability
BY FAX
john Carter
Office of Chief Counsel
Division
of Investment
Management
Commission
and Exchange
Securities
Street
N.W
450
5th
Washington D.C 20549
Datastrealu
Datastream
Datastream
International
International
International
File No 801-24551
File No 801-41452
Limited File No 80124281
Inc
Inc
collectively Datastream
Dear
Mr Carter
with the above-captioned
registrants
connection
staff not
for
that
the
1993
assurance
request
18
January
the
Commission
if
the registrants
action
to
enforcement
recommend
advisers
statements
as
investment
their registration
withdraw
Advisers
Act
of
1940
Advisers
under the Investment
you
information with respect to
have requested
supplemental
with Noinura and Hoare Govett as
Datastreams
arrangements
and 14 of the January -18th request
described in footnotes
made
In particular
you have asked whether the investment advice
customers through
to Nomura and Hoare Govett brokerage
available
under
technical
facilities is subject to regulation
Datastrealus
the Advisers Act
In
Act
Nomura
arrangements
Co Ltd
firm has
Nomura Securities
Japanese brokerage
InternatIonal
Ltd
to
provide
with Datastream
contracted
forecasts of the business
Datastream with data containing
of Japanese
prepared by Nomura Research
companies
performance
those companies
and comments concerning
Institute
this Nomura
then
NRI
Datastream
provides
analysts
by
prepared
that are designated
subscribers
by
data to those Datastream
subscribers
in the United
Kingdom
Noniura in writing Datastreain
and in continental
Europe access the Nomura data However
States are not allowed
subscribers
in the United
Datastream
to
Since the investment advice made available
to the data
access
technical
customers through Datastreams
Nomura brokerage
the United
facilities is made available only to customers outside
is
not
to
under
the
the
advice
regulation
subject
States
NRI
Advisers
Act
izob.th
El
IOare
Govett
Npr5Jorth
P.03
085207599
arranqxnents
British brokerage
firm has made
to publish securities
with Datastreain
arrangements
in the form
and analyses prepared by Hoare Govett
recommendations
blue book The blue book which is now published
of
hard-copy
is
issued in the United States by the Hoare Govett
every week
ABN is
Securities
Inc
ABN7MR0
division of
Act File
under
the
Advisers
adviser
investment
as an
registered
to
made
available
advice
investment
Since
the
No 80123663
technical
Datastreams
customers
through
Hoare Govett brokerage
States by
facilities is made available to customers in the United
to
advice
is
the
subject
investment adviser
registered
under the Advisers Act
regulation
Hoare
Govett
ABN
USA
If
you have
any
further
questions
please
call
me
at
508-
5107101
Sincerely
Elizabeth
yours
Norsworthy
Advisers
Section
NCRSWORTHY ESQ
ELIZABETH
69
NORFOLK
508-520-7101
MEDWAY
STREET
MASSACHUSEUS
January
Harman
Thomas
and
Associate Director
of Investment
Division
Securities and Exchange
450
5th Street N.W
Washington D.C 20549
Dear
02056
18
1993
FAX 508-520-7599
Chief Counsel
Management
Commission
Datastrealfl
International
International
Datastrealfl
International
Datastream
Act
202a11
File No 80124551
File No 80141452
Limited File No 80124281
Inc
Inc
Mr Harman
collectively
registrants
above-captioned
and financial
information
providers of economic
will
not
recommend
the staff
hereby request confirmation that
Commission
action
by the Securities and Exchange
enforcement
under the
as investment advisers
if their registrations
withdrawn
Advisers Act of 1940
Advisers Act are
Investment
The
Datastrealfl
SEC
BackcroUfld
The Datastream registrants are all wholly owned indirect
publicly held
of Primark Corporation
subsidiaries
primarily in the provision of information
engaged
holding
company
25 1992 Primark through its various
services On September
common
of the issued and outstanding
all
subsidiaries acquired
Dun
Bradstreet
from
The
registrants
stock of the Datastream
of its affiliates
and certain
Corporation
Primark
information
is
worldwide
in 1964 Datastrealtt
Founded
which
in
London
services bus iæess with principal headquarters
financial
to
financial
information
online economic and
delivers
and other investment professionals throughout
institutions
is also
Australia and North America Datastream
Asia
Europe
valuation
and
leading provider of computerbased portfolio
in the United
Kingdom
services
accounting
UK
--
series of linked databases of
The core of Datastream is
data
collected from wire
and financial
extensive economic
national
and international
services official publications of
stock options and futures exchanges other information
agencies
has
brokers dealers banks and issuers Datastrearn
vendors
data reliability
of multisourcing to enhance
policy
specific
into
the Datastrealu
data
feeds
run
The
and
timeliness
accuracy
collected
and
Computer Center where the data is
Processing
into
individual security
organized
e.g by country industry
databases These databases are
data series in discrete
for accuracy
checked
and
updated
continually
economic
and
options Data
issuers
conditions
interest and
conditions
includes
economic
worldwide
relating to
and
industrial
other
well
as
economic
exchange rates as
the
such
as
statistics
from
sources
commercial
performance
for
the
Organization
Fund
thIMFtt
International Monetary
and Development
tb0ECDt and Bundesbank
Economic Cooperation
data
from profit and loss
includes
issuers
Data relating to
and
sources-anduses-of-funds
statements balance sheets
statements published by those issuers
The
data
collected
relates
equities
to worldwide
bonds futures
to equities includes earnings and dividends
relating
number of
from all major markets and
on over 30000 stocks
historical
earnings and
emerging markets This data includes
dividends data
as well as forecast data supplied by market
and yield
specialists Data relating to bonds includes maturity
guaranteed
on over 44000 issues of corporate and government
Data relating to futures and
and indices
all Eurobonds
Data
bonds
current prices previouslytraded prices
options includes
from the
and
volume
intra-day high and low values
trading
LIFFE
and
futures
including
exchanges
international
options
EOE
SOFFEX Switzerland
MONEP
and
MATIF
Paris
London
and
Philadelphia
DTB
Chicago
Germany
Amsterdam
total over 720 million data items are collected with
320000 updated daily Datastream has significantly expanded .and
In
and intends to continue to do so The
its data coverage
enhanced
Datastream
The World
Datastream
brochure
captioned
attached
added to
that
have
been
the
data
items
in
detail
Tour describes
the
last
four
databases
over
years
the Datastream
and financial information
Datastream
provides economic
industries worldwide
and
financial
services
to the securities
Its main customers are investment managers and institutional
information for
investors who use financial and economic
include publishers
Other
users
investment research and analysis.1
schools and
business
off inancial journals and daily newspapers
customers
from
has
over
1400
universities Currently Datastream
fees
fixed
annual
subscription
These customers pay
36 countries
services
online
they
based on the specific
quarterly in advance
receive
firm has contracted with
Japanese brokerage
data available to Nomura
Datastream to make Nomura-generated
at no
customers who are also Datastream subscribers
brokerage
with
Hoare
similar arrangement
extra cost Datastream has
with
which has contracted
British
firm
brokerage
Govett
available
to Hoare
to make Hoare Govettgenerated data
Datastrealu
blue
book
hardcopy
customers in the form of
Govett brokerage
Nomura
published
quarterly
DatastreamS
services delivered online to customers
networks work stations or
pcs
computers
customers to
mainframes provide analytic software that enables
The
databases
and manipulate the data in the Datastream
access
data
retrieve
are designed to let the user
software packages
and manipulate the data to produce
databases
from
the
series
and other analyses
graphics statistics time series analysis
are described in more detail below
software packages
These
personal
that allows the
is
Datastream service
EconovieW
EconoVieW
economic
user to retrieve manipulate and chart historic
data such as economic indicators interest rates exchange
rates stock market indices and commodities International
on the
news headlines current exchange rates and prices
also
available
issuers
are
of
UK
most active
equities
the day Users can retrieve current and historical
thoughout
such as per
and apply statistical functions
information
to the data
and
regressions
moving averages
cent changes
is
comprehensive
company
Companywatch
to search
enables
the
user
which
service
accounts research
items-and
related
accounts
the database on all company
of its
percentage
companys net cash as
ratios such as
as
revenues
companys pretax
net tangible assets and
search
on
also
conduct
user can
of its sales
percentage
basis
single country or multiple country
Companywatch
standard equity service
Equity Research With DatastrealtiS
and markets compare
data
on
issuers
basic
extract
users can
in
the same industry or
with
others
issuers
one
performance
to
calculations
market sector and perform mathematical
rates
measure volatility beta factors trends and growth
Datastreams fixed interest service
Interest Researªh
wide range of
historic data on
provides statistical and
investments and related instruments Users
fixed interest
to
bond issue
can extract over 100 data items with respect
program
for display and analysis Programs within particular
of
optional
to
complete
range
apply
suites allow users
values
such as the users tax rates expenses for
calculating
yields and expenditures related to fixed
interest investments
Fixed
and
commodity
Commodity and Financial Futures Datastreams
service
with
users
financial
futures
provides
graphics
stock
facilities to plot historic data on futures contracts
market indices and interest and currency exchange rates
with moving averages and percentage
in any
together
changes
combination
The service enables the user to combine any
as an expression
or equation
data series in any combination
traded options service
is
programs that allows the user to display
and chart historic market data and to retrieve
realtime data For example users can access the Black and
Scholes model to calculate theoretical or fair values of
where the underlying securities are
option contracts
and the Black model to calculate theoretical or
equities
fair values
of other option
contracts
Traded
Options The Datastream
of
package
manipulate
Graphics
and
money
things
momentum
The
allows investment analysts
graphics package
to
data to create among other
manipulate
managers
highlow closing price charts moving averages
charts
and price and trading volume graphs
TimeSeries
analysis The TimeSeries package is in effect the
statistical equivalent
to the Graphics service
and enables
to
create
and
store
their
own
users
expressions lists and
series
Users
also
data
can
manipulate the data with
functions such as moving averages lags and leads and
and multiple regression
percentage
changes
Data Channel Data Channel provides existing customers with
data on their own
to process Datastreams
the opportunity
direct link is established
users to
permitting
pcs
request data from the Datastream databases in computer
readable form With WorldBase
an additional
Data Channel
feature users can import Datastream data directly into
Lotus 1-2-3 or Symphony spreadsheets. With DSWindows
users
services
Datastreams
through Microsoft Windows
can access
Version 3.0
II Analysis
11
an
of the Advisers Act defines
Section 202a
for
as
who
compensation
engages
adviser
investment
any person
either
or
through
of
directly
advising
others
in the business
or writings as to the value of securities or as to
publications
or selling
of investing in purchasing
the advisability
and
as
part of
regular
securities or who for compensation
business issues or promulgates analyses or reports concerning
securities
Datastream
represents that it does not for compensation
others as to the value of
in the business of advising
engage
regular
securities or for compensation and as part of
business issue or promulgate analyses or reports concerning
as that
the meaning of Section 202a
securities within
by the SEC staff Inthis regard
Section has been interpreted
does not attach any value
that
Datastream
Datastream
represents
the purchase
sale or
judgment to its data and does not suggest
further
subscribers
Datastream
to
its
of
securities
holding
and
software is licensed as
package
that Datastreain
represents
Datastream
of
user
interests
to
the
any
personal
is not tailored
subscribers
are sophisticated users who may arrange the various
11
elements
in
package
to
suit the
subscribers
particular
needs
The SEC staff has taken the position that the presentation
does not
of securities data or information to subscribers
of Section
the
within
or
meaning
constitute
an analysis
report
in its raw
is
available
the
information
if
readily
202a
not
are
of
information
highly
the categories
presented
state
or
information
is
not
presented
organized
the
selective and
or sale of any
holding
in
manner which suggests the purchase
has expressed
the
staff
security or securities.2 In particular
in
the view that information is not organized or presented
sale
of
securities
holding or
manner suggesting the purchase
where the customer or subscriber not the information provider
provide
selects the search criteria or requests that the service
11
L.P
avail Dec
UniVu System pub
See EJV Partners
avail July
Financial
Services
Inc
pub
Media
General
1992
avail
Feb 27
Street
Inc
Charles
Securities
pub
20 1992
1987 Wallace
Butcher
Singer Inc
pub avail Jan
1987
Lin
pub
avail
April
15
1985
The
select information.3
certain
assurance to providers of various
and pricing
offering calculations
tools.4
mathematical
also given noaction
computer software services
models that function as
staff has
Most recently EJV Partners L.P received assurance that
action to the
enforcement
the staff would not recommend
if
that
limited
Commission
partnership operated
computer system
marketed
that
to
insurance
companies
and
banks
system
will
institutional
UniVu
securities firms and
money managers
available
bond
combine databases
of publicly
information third
formulae
and
models
spreadsheet
party data feeds mathematical
matrix pricing function for bond portfolios into
and
capability
single computer system UniVu will also allow electronic
communication
between customers through its Private Pages
The partnership will
mail feature
function and an electronic
monthly perterminal fee that has no relation
charge customers
customers portfolio
or to
to assets under management
UniVu
UniVu will enable customers to feed data directly into
and investment models which may be designed
various
calculations
and models
the
customer
or
provided
by UniVu The calculations
by
used
will
be
and
available
UniVu
widely
generally
provided by
formulae taught in business schools and published in finance
UniVus Private Pages service will allow customers or
textbooks
firms associated with
general partner of the partnership to
transmit their own proprietary products such as financial
models research reports information on bond indexes and
securities information directed at dealers to other customers
through the UniVu system The customer providing the product will
to specified UniVu customers UniVu will
be able to limit access
have no control
over nor access to any messages or information
Private Pages function
the
sent through
L.P
UniVu System pub avail Dec
See EJV Partners
1992 Media General Financial Services Inc pub avail July
20 1992 Investex Investment Exchange Inc pub avail April
1990 Petroleum Information Corp pub avail Nov 28
1989
L.P
1992
1988
UniVu System pub avail Dec
See EJV Partners
Inc pub avail Dec 15
Executive
Asset Management
Wilson Associates
pub avail May 25 1988
In granting no action assurance with respect to UniVu the
that UniVu will be available only to
staff found significant
the
institutional firms and not to the retail public Further
staff noted that UniVu is designed to contribute to the
data
of the bond markets by providing real time market
efficiency
fast and
feeds to users who will be able to analyze the data in
efficient manner The staff found that the software services
tools to facilitate
would
function merely as mathematical
users own analytical efforts relying on representations that
UniVus subscribers will be sophisticated institutional investors
who will receive the same software packages
and who may arrange
elements in
to
suit
the
customers
the various
package
needs
The
staff
further
found
that
while customers
particular
in
investment
activities
advisory
through UniVus
might engage
UniVu
will
act
Private Pages system
merely as
passive
conduit as evidenced
communications
by its lack of control over
the dispatching
and contents of the messages.5
General Financial Services
Inc Media
received assurance that the staff would not recommend
enforcement
action to the Commission if Media General withdrew
its registration
as an investment adviser Media General compiles
such as securities price and trading volume on
statistical data
bonds and equities
issued by publicly-held companies
from wire
servIces
and public filings by the issuers Media General makes
that information available
on
subscription or peritem basis
These tables and reports are provided to customers on
regular
basis and upon request their availability is not timed to any
Media General represented that it does
market activity
specific
not attach any value
judgment to its data and does not offer any
predictive
data opinions projections or quality valuations6
Similarly Media
General
See
EJV Partners
L.P UniVu
System
pub
avail
Dec
1992
Media General did not offer any predictive
data
Although
its
the
staff
has
that
to
or projections
subscribers
recognized
of
data
and
such
as
the provision
projections
predictive
data supplier does not
forecasts by
earnings and dividends
constitute
investment advice as long as the data supplier does
the purchase
sale or holding of the securities
not recommend
of
those
to its subscribers
that are the subject
projections
avail
Investors pub
See Advantage
May 13 1985 where the
assurance to
sole proprietorship
staff gave no action
proposing
to furnish investors with earnings forecasts as well as stock
Service and
prices obtained from the Dow Jones News/Retrieval
Services Incorporated
Foundation
pub avail Oct 13 1972
where the staff did not object to the provision of indicated
yield as an estimate only See also Financial Psychology
Media General data may be organized alphabetically
by
within an industry
name or ticker symbol alphabetically
ranking such as the 50 issuers with highest sales
group or by
in
to
given year The data may also be ranked according
criteria such as stock price performance over
performance
fixed period dividend
information earnings per share or priceearnings ratios Customers determine the ranking criteria for
each search request and direct the company to conduct
the search
and compile the ranking Media General represented that the
of information
from its database does not suggest
presentation
sale or holding of securities.7
the purchase
issuer
Similarly the staff gave noaction assurance to Investex
Investment
Inc Investex
Exchange
computer listing
service
for limited partnerships
if Investex operates the
service without
registering under the Advisers Act
information
to be provided by Investex would be readily
The
the
available to
or
public In its raw state through prospectuss
in
offering circulars of limited partnerships advertisements
trade journals and magazines
or other similar listing services
of information would not be highly selective
The categories
because there would
be no restriction as to the geographical
location type of business size of the partnerships or price
range of the units to be listed
of the data on the computer screen would
The presentation
user of the computer
on the selection made by the user
depend
database would define
descriptive
parameter with respect to an
investment opportunity
in which
the user was interested
and then
descriptive search request to cull the database for
perform
those parameters.8
entries falling within
Corporation
pub avail
in
Services Incorporated
See
July
Media
20 1992
General
Mar
23
1988
staff response
Financial
discussion
to
Services
no action
Inc
of
Foundation
request
pub
avail
Investex
Investment
Inc pub avail April
Exchange
Petroleum
Information
1990 Accord
Corporation
pub avail
Nov 28 1989 where an oil and gas online computer listing
service
received assurance that the staff would not recommend
enforcement
action
to the Commission if that Corporation
operated
service
without
the
registering under the Advisers Act See also
no action
assurance
given to Charles Street Securities
Inc an
firm
that proposed to publish
investment banking
quarterly
statistical compilation
of data on insurance companies
pub
See
The staff also granted no action assurance to Wilson
of
and licensing
Associates with respect to the development
to
establish
on
computer software that would enable users
portfolio mixes and
theoretical basis
variety of hypothetical
investment returns and risk
evaluate the hypothetical
be
of those portfolios The software would
characteristics
basis to sophisticated users such as
nonexclusive
licensed
on
investment bankers banks insurance companies brokerdealers
firms that manage substantial
financial planners and accounting
as
investment portfolios The software would be licensed
interests of
be
tailored
to
the
personal
would
not
and
package
any user
of
from categories
The database would be assembled
of
items
such as
that
would
consist
information
asset classes
and
the
U.S
Bill
Index
Price
the
Treasury
the Consumer
Index
also
Index
The
database
would
500
Standards
Poors
Composite
include portfolios managed by pooled fund managers such as
Wilson Associates
mutual funds and insurance separate accounts
with
to
asset
classes and with
respect
represented that the data
would
not be highly
portfolios
respect to pooled fund managers
fund
recommend
asset
class
or pooled
and would not
any
selective
would
be
based
on
theoretical
manager Portfolio evaluation
pricing models the software would organize the data and
facilitate multiple arithmetical computations
by the user
request for noaction
In granting Wilson Associates
was
the staff stated that this noaction position
assurance
on the firms representation that the services
based particularly
and would
involved would be limited to arithmetical calculations
securities
analysis regarding
not involve
any recoinmendationor
or
any
pooled
fund
manager.9
the staff declined to give no action
By contrast
brokerage firm which
proposed to
assurance to Butcher
Singer
customers for an annual fee
monthly report
offer its brokerage
While the
in
the
customers
each
portfolio
security
concerning
staff found that certain data in the reports would be available
be derived by
in its raw state and while other data would
declined
because
staff
no action
the
calculations10
arithmetic
avail
Feb
1987
27
See Wilson
Associates
pub avail
May
25
1988
staff found that the information that Butcher
to
in the reports with respect
Singer proposed to include
market
value
of
each
income
and
the
security
estimated annual
of the total value of the portfolio was not data
percentage
10
The
as
10
and the report was apparently
the data was highly selective
basis for
intended to provide the brokerage customer with
whether to hold or sell existing or to purchase
evaluating
securities for his or her portfolio.1
different
The information
provided by Datastream
available
in
its raw state
readily
to
its customers
is
the extensive economic
and financial
Datastrealu
collects
from wire services
information contained
in its databases
international
agencies
government
departments stock options
and futures exchanges
brokers dealers banks issuers and other
to Econoview
have
information vendors For example subscribers
headlines
wire
services
such
to
international
news
through
access
such
economic
indicators
from
international
agencies
as Reuters
such the UK
departments
as the OECD and IMF and from government
Office
the
economic
and financial
Central Statistical
Similarly
Research
subscribers
includes
to Equity
data made available
balance sheets
financing tables and
profit and loss accounts
ratios reported
by issuers other information vendors
accounting
and Standard
Poors as well
such as Extel Telerate
Hoppenstedt
forecasts from market specialists2
and dividends
as earnings
As in the case of UniVu and Media General this
is theoretically
available to Datastream subscribers
information
in its raw state For example theoretically.an institutional
to
directly with each wire service
money manager could contract
to the universe of wire service information
have access
directly with
available Or the money manager cpuld contract
each market specialist
following
equity issues of interest to the
forecasts for
to earnings and dividends
manager to have access
the
of
economic
and
those issues
proliferation
However
has made it
financial data now relevant to investment decisions
if not impossible for investment decisionmakers
impracticable
true
sufficient
raw data directly This is especially
to access
where
is
investment
international
user
in an
context
making
in its raw state However
the staff has found
readily available
which
is
derived
from
mathematical
of
data
that the provision
is based on data readily available
in its
calculations
and which
information
fail
the
to
does
not
cause
an
provider
raw state
staffs threeprong test See for example the no action
assurance given to Wilson Associates
supra note
12
See
Butcher
See
supra
note
Singer
pub
avail Jan
1987
11
decisions
based on
myriad of national
indicators
international
economic
regional
and
As in the case of Media General Datastream makes numerous
ranging from simple
formats
available
to its subscribers
data
issuers
and
issues
to complex graphics
of
listings
alphabetical
Subscribers to
such as moving averages and momentum charts
do have access to issuer and issue
certain software packages
criteria such as
ranking of
rankings based on performance
sector
based
on
industry
earnings
per
issuers in
particular
these
do
not in
true
in
Media
rankings
share but as was
General
that
security
particular
any way directly or indirectly suggest
sold or held Rather the rankings are
should be purchased
the
order the raw data to facilitate
intended only to objectively
users investment decisionmaking process
data relevant to investment decisionmaking has
in investment decisionmaking
the process involved
has become increasingly
complex While digesting or assimilating
manual or even mental process for the investment
data was often
decade
decisionmaker
ago investment managers must now apply
and perform multiple calculations
complex iuatheinatical.formulae
In some cases
evaluate an investment opportunity
to adequately
have become standardized an investment
these computations
the formulae directly from public reference
manager can access
have been developed
materials In other cases the computations
and
the
so
considered
information
providers
the
methodology
by
their
is
or
that
use
protected
by
licensing
copyright
unique
Subscribers
to the information service essentially purchase .the
in their investment decision
to
use
these calculations
right
AS the
proliferated
making
process
that provision of
now recognized
tool
does
not
cause the information provider
proprietary analytic
investment
adviser
the staff
an
Although
to be considered
reservations
with
to
proprietary
respect
initially expressed
tools during the infancy of the information service
analytic
that
the staff has more recently taken the position
industry13
has
built
no subjective
as long as the information provider
into the formulae or computations the provision of those
factors
investment advice
For example
tools does not constitute
The
Oct
1975
staff has
See e.g MonchikWeber Associates Inc pub avail
23 1981 and Bridge Data Company pub avail May 31
12
the staff granted noaction assurance with respect to analytic
software developed
by Wilson Associates which was considered
proprietary product and was made available only to licensees
the
Counsel for Wilson represented that no judgments regarding
factor
made
in
of
were
or importance
weight
any particular
preparing the software the software was only intended to be an
arithmetical tool for licensees
The software packages made available to Datastream
subscribers
also contain analytic tools that can be used by the
subscribers
to perform various calculations
ranging from simple
In some cases these
arithmetic
to complex algebraic equations
mathematicalformulae that are already in
tools are standardized
the public domain in other cases the tools are considered
by patent
proprietary products or intellectual property protected
Those tools may have been developed
or copyright
by another
such as the Black-Scholes
model for computing
person or entity
or they may have been developed
option values
by Datastreaxn
itself -- such as yield formulas relating to fixed interest
instruments In all cases the analytic tools devised by
Datastream
products
are
valueneutral
Datastreani
has
not
in developing
its proprietary
factored
in any subjective
factor
of information made
The categories
subscribers
are not highly selective
available
to
Datastream
Far from selecting out data items from the universe of raw
available
with respect to economic
conditions and finanial
data
Datastreams
is
to
furnish the subscribers
information
objective
with
access
to as comprehensive
to each of its software packages
In addition
Datastream has
database as possible
specific
data reliability timeliness
policy of multisourcing to enhance
and accuracy
with
total over 720 mulliondata items are collected
320000 updated daily For example approximately 2000 market
In
850
indices from 20 different countries are covered
interest rates are available on adaily basis
international
international
endgiving middle bid and offered rates and 1600
ofday currency exchange rates In addition data relating to
is included in the equity database
and data
over 30000 stocks
to over 44000 issues is included in the bond database
relating
13
in Investex there is no restriction on the data
The
and made available to Datastream subscribers.14
subscribers
depends upon the
of data made available to
categories
to which they have subscribed For example
software packages
subscribe
can
only to the North American database which
user
on nonNorth American equity securities
screens out information
American
the user can subscribe to the non-North
or conversely
North
American
information
on
which
screens
out
database
As
collected
securities
case in Investex it is only the subscriber
who
selects the data that will appear on the
not Datastrealu
-subscribers computer screen Data Channel provides subscribers
direct link to the Datastream databases so that they can
with
form As in
request data from the databases in computer readable
for
data in
conducts
search
the
user
Lexis or Nexis search
and
then
can
parameters
the database by defining descriptive
time
at
later
retrieved
data
for
the
display
store or download
at
their
data
stage
or modify
requests
any
delete
Users can add
users may also input their own
software packages
With certain
data For example subscribers to the Fixed Interest Research
in
can input their own tax rates and expenses
software package
fixed
interest
investments
income from
anticipated
calculating
As
was
the
who are also
subscribers
Datastreaitt
access
to
are
NoTmuragenerated
customers
given
Nomura brokerage
Datastreaiu
subscribers
available
to
other
is
not
data which
are
customers
HoareGovett
given access to
brokerage
Similarly
to other
which
is
not
available
data
HoareGOVett
generated
hard-copy
quarterly bluebook
through
Datastrealil subscribers
See
note
However as in the
supra
published by Datastream
to
be
offered
by UniVu
case of the Private Pages facility
HoareGovett
this
Nomura
and
Datastream has no control over
data As in UniVu Datastream functions only as
generated
firms and
conduit between these brokerage
passive communications
their customers
14
As
noted
above
14
that Datastream makes available to its
The information
in
manner which
or presented
is
not
organized
subscribers
of
or
or
sale
security
the purchase
holding
any
suggests
securities
pcs
DatastreamS services delivered online to customers
work stations or mainframes provide analytic
networks
data
software that enable customers to access and manipulate the
software
are
designed
databases
The
packages
in the Datastream
and
to let the user retrieve data series from the databases
such
as
manipulate the data by applying analytic tools
mathematical
formulae graphics regressions and tables to
graphics statistics time series analysis and other
produce
analyses
It is the customer -- not Datastream -- who selects the
data series from the databases and the
criteria for retrieving
tools that will be used to manipulate that data The
analytic
of data and types of analytic
customer first selects categories
offered by
to
tools by subscribing
particular software packages
data
to
be
retrieved
selects
the
then
The
customer
Datastream
used
to
and
the
tools
to
be
manipulate
within those categories
search parameters
that data by defining
specific
As in the case of Media General Datastream makes the data
in its databases available to its customers on
contained
basis Datastream customers pay fixed annual
subscription
on
based on the specific
fees quarterly in advance
subscription
data
As
in
Media
delivery
General
they receive
line services
market activity While data in the
is not timed to any specific
market activity
is generated
databases
by specific
Datastrealu
market
downturn
or published
Indicators
of
such as economic
of
determination
the
reports of an issuers negative earnings
is
that
data
and
when
to
retrieve
whether to retrieve that data
subscriber
not
Datastream
by
made by the Datastream
Datastream
As in the case of UniVu and Wilson Associates
Datastreams
products are not marketed to the general public
are sophisticated users such as investment
main customers
banks insurance companies brokerdealers financial
bankers
investment
firms that manage substantial
planners and accounting
portfolios As in UniVu and Wilson Datastream software packages
nonexclusive
basis
to these customers on
are made available
interests
the
tailored
to
not
personal
are
software
the
packages
of
any
specific
user
15
does not build any subjective factor into its
that
directly or indirectly suggests the
software packages
In
of any security
or securities
sale
or
purchase holding
that
had
such
Butcher
firm
as
Singer
brokerage
contrast to
would
use
the
its
customers
in
how
interest
financial
brokerage
their
holdings
in
on
portfolio
data supplied
monthly reports
and its affiliates have no direct or indirect
Datastream
subscriber uses Datastream data
in whether
interest
financial
tools
to
particular
and analytic
purchase sell or hold
Datastreain
security
III
Conclusion
submits that the provision of the information
Datastream
the
does not constitute
described above to Datastream subscribers
of
Section
advice
within
the
investment
meaning
of
provision
as that Section has been
of the Advisers Act
202a
The
information
the
staff
provided by Datastream
by
interpreted
its raw state the
is readily availab1ein
to its subscribers
those subscribers
are
information
made
available
to
of
categories
and the information is not organized or
not highly selective
or
holding
in
manner -which suggests the purchase
presented
11
sale of
any
security
or
securities
Datastream respectfully
On the basis of the foreg�ing
it will not recommend
from
the
staff
that
confirmation
requests
continues to
Commission
if
Datastream
action
the
enforcement
by
without
asan -investment
described
above
registration
operate as
adviser
at 508-510-7101
if you have
call the undersigned
to
this
comments
with
respect
request We would
any questions or
in the event
meet
with
the
staff
to
an opportunity
appreciate
to
issue
negative response to this
that the staff is inclined
Please
request
stamped
selfaddressed envelope
is
enclosed
of this letter by stamping
receipt
acknowledge
of this letter and returning
of the cover page
to the undersigned
Sincerely
E1ibeth
Attachment
yours
Ncirsworthy
the
the
Please
enclosed copy
stamped copy
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.