Data Consolidation System FAQ - 2
1) 4.4 section 3: system architecture
Question:
Is the STAMP protocol required or preferred?
Answer:
The CSA has no preference, neither for nor against STAMP. There may be advantages for using STAMP and there may be advantages for using another protocol, such as FIX. The respondent is requested to elaborate on the protocol they intend to use and to discuss the advantages and disadvantages of the proposed protocol implementation, including the costs and time to implement.
2) 4.10 section 9: cost recovery and revenue generation
a) Source code ownership
Question:
Who owns the source code?
Answer:
The exact answer to this can be developed as part of final contract negotiations, which would include escrow rights and rights of re-assignment. Although the source code does not need to be owned by the CSA, the respondent must accept the following terms.
· The CSA has no concerns about the respondent using this technology in other marketplaces. The respondent can consider that they would be free to offer a similar product to other, external to Canada, marketplaces.(1) In fact, some advantages include: distribution of development costs, distribution of upgrade costs(2), and enabling the DCS to obtain new features developed elsewhere.
· Any such agreement could not jeopardize DCS operational support and maintenance nor the ability for the DCS to be enhanced, even if the respondent is no longer the operator.
· Over time, any organization that is the DCS operator must have full access to ALL RELEVANT source code, documentation, procedures and documentation. This material would include all material required for the ongoing operation, maintenance and enhancements as of the time of the severing any relationship with the current operator; it would not necessarily include any enhancements made by the respondent after this time to the product or made to the (commercial) product base but included in the DCS system.(3)
a) Ensuring a revenue stream
Question:
· Will the CSA consider legislating the use of the Marketplace Feed in order to ensure a revenue stream?
· Will the CSA consider legislating the use of the Marketplace Feed as a replacement to the CCDF?
· Why should the marketplace use the DCS feed instead of existing feeds?
Answer:
The CSA feels that this initiative is essential to the ongoing health of the Canadian marketplace. Thus, it will take the necessary steps to ensure that this system is properly developed and implemented, in a timely manner.
However, the CSA does not feel that it is appropriate to legislate solutions without a clear understanding that this is the only recourse.
Thus, the CSA is requesting that each respondent provide in their submission their analysis of the costs, revenues and conditions that will ensure continued and effective operation.
a) Contract Term
Question:
It may take a year or more to complete the design, development and implementation of the DCS. Until it is operational, the Data Consolidator could not charge fees. Is there flexibility to start the first 5-year term when production operation begins or to extend the term of the 1st period operation to, say, 8 years?
Answer:
Yes. There is some flexibility. The details are to be negotiated.
b) How many DCS (systems)
Question:
Does the CSA anticipate that there will be more than one Data Consolidation System?
Answer:
For equity markets, only one is practical. As noted in the RFP Consolidated Plan Discussion Paper, the Information Provider is to address the other markets.
c) License non-renewal
Question:
Under what circumstances would the license to operate the DCS not be renewed?
Answer:
The specifics will be part of contract negotiation. In general, the CSA would not renew the license if there were serious ongoing issues with the DCS. The scope would include performance, stability, reliability, access, and so on.
The CSA would bring steps for early termination if the operation were to such a state as to adversely impact the integrity of the Canadian marketplace.
4) Appendix A: Extract from RFP
3.7 Business Processes
3.7.1. Change
The Data Consolidator will be responsible for establishing Canadian market data standards and coordinating the development, testing and implementation of change. It is therefore crucial that a stringent change management process be implemented on an ongoing basis, with the appropriate notice periods and escalation processes.
3.7.2. Advisory Committee
The Data Consolidator will consult with an Advisory Committee composed of representatives from marketplaces, data recipients and representatives appointed by the CSA including external business and technology experts. The Advisory Committee will be chaired by a Chairperson appointed by the CSA and will be subject to review by the CSA. The Advisory Committee will be organized once the Data Consolidator selection and contract processes are complete. It is intended that there will be two different stages for consultation between the Data Consolidator and the Advisory Committee: (1) Developmental Stage - This would include consultation during the development, testing and implementation phases. The Advisory Committee may raise issues and make recommendations to the Data Consolidator. It is within the discretion of the Data Consolidator to raise substantive issues with the CSA. It is expected that the Advisory Committee should meet with the Data Consolidator at least monthly* prior to DCS implementation. Minutes from the meeting will be provided to the CSA.
* Or regularly, as negotiated
Footnotes
1. For Canadian marketplaces, this would be dependent upon CSA approval, not to be unreasonably withheld.
2. For example the cost to upgrade the software to new hardware and software platforms over time.
3. If a packaged solution were selected, the contract must be able to accommodate these issues.
