Vendor Reporting eXtensible Markup Language is the new XML on the market-data block, and it has finally begun to get attention from vendors. In fact, HyperFeed (booth # 1427) recently announced that it is the first market-data vendor to implement the standard, which make more efficient its interactions with the New York Stock Exchange.
Using VRXML, HyperFeed can communicate administrative information about its client firms to an exchange. This includes such information as name and location of the client, as well as the amount of terminals at a client receiving data products from an exchange.
"Billing and reporting is a complex and administratively cumbersome problem for everyone in the industry, including exchanges, information providers, vendors and users," says Mike Atkin, vice president and director, Financial Information Services Division, Software Information Industry Association.
FISD worked with the NYSE and technology consultant Gemini Systems to develop VRXML last year.
Because of its user benefits, VRXML is positioned to be the next market-data standard, says Ron Jordan, vice president of market-data products for the NYSE. "VRXML allows users to do inventory-based reporting, and it's extensible, so it can be expanded without having to go back and reprogram," he explains. "It also has built in edit checks so that users can check information before it is submitted, facilitating the passing of correct and accurate information."
Jordan says VRXML can be used instead of the Vendor Automated Reporting System, which the NYSE implemented as an industry standard over 12 years ago. In addition to being technologically surpassed by VRXML, VARS is a transaction-based reporting system, meaning that vendors only report administrative changes to exchanges, such as the addition or subtraction of a user terminal carrying that exchange's data.
If a vendor misses a transaction, such as a new sign-on, Jordan explains, the exchange will bill the firm incorrectly. "This system is much more prone to errors and requires periodic reconciliation to make sure that our information matches the vendor's information," he says. "Inventory-reporting (like VRXML provides) ensures that invoices are as accurate as possible and ensures payment for both the exchange and the vendor."
Jordan promises that, at least for the time being, the NYSE is still accepting VARS as a reporting format through TCB Data Systems, which processes the data and transfers it to the exchange. "You can't move from one standard to another overnight," he says. "We're in the early adapter phase of VRXML acceptance, but it's proven to be very effective with the users we have."
HyperFeed has been using VRXML for two months, and is excited to be one of those early adopters, according to Alicia VanDeVeer, vice president of product at the vendor. "It was a collaborative initiative with the NYSE and FISD, where we all saw the benefit of implementing this as an industry standard," she explains. "It provides greater accuracy of reporting and eliminates discrepancies between vendors, exchanges and firms."
While the NYSE's Jordan notes that five or six other vendor commitments to VRXML may be in the works, the industry has yet to see another step forward. "It takes money and resources to program VRXML," Jordan explains, adding that the standard was only implemented in the beginning of this year. "In this environment, there isn't spare change, especially for an administrative system."A spokesperson for Reuters says that while the vendor is XML compliant for reporting, it is too premature to comment on their commitment to VRXML.
Jordan notes that the NYSE has interest in other vendors implementing VRXML, and would be more willing to roll out other initiatives those vendors.
Yet, Jordan says that the NYSE's quest for a more efficient and cost-effective reporting system extends beyond VRXML into standardizing procurement and set-up, billing cycles and workflow. "VRXML is just a piece of the puzzle."