Report Calls for Transparency and Development of Standards in the Alternative Data Market

Fund managers are increasingly looking to non-traditional data sources to inform their investment decisions. The collection and use of that so-called “alternative data” presents a number of legal, technical and ethical challenges. A recent report, jointly produced by the Open Data Institute and Refinitiv, a global provider of financial market data, reviewed the primary sources of alternative data; the key legal and ethical issues arising out of its use; and the growing need for standardization. The report offers recommendations for developing transparency and trust in the market for alternative data. This article discusses the report’s principal findings and recommendations. For a look at the SEC’s focus on alternative data use, see “Focus Areas for Private Fund Managers From OCIE’s 2020 Exam Priorities” (Feb. 27, 2020). See also our two-part series on best practices for using alternative data: “Data Gathering and Managing Data Providers” (Feb. 6, 2020); and “Mitigating Regulatory and Other Risks” (Feb. 13, 2020).

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