Media to Go Tech-Free in Data Release ‘Lockups’

The Trump administration says reporters' use of computers in secure lockup rooms can give high-speed traders a "head start" on market-moving news.
Matthew HellerJanuary 20, 2020
Media to Go Tech-Free in Data Release ‘Lockups’

The U.S. Department of Labor is changing the way it releases potentially market-moving information to the public, saying the current system gives an unfair advantage to high-speed traders.

The new procedures bar reporters from using electronic devices in the secure “lockup” rooms from which they prepare stories in advance of the release of the DoL’s monthly employment and other bulletins. The stories are transmitted online to the public as soon as the lockup ends.

According to the Bureau of Labor Statistics (BLS), the use of computers in lockups allows media organizations such as Reuters and Bloomberg to “pre-load” data so traders who subscribe to their services potentially get information before the general public, which has to wait to download the data after it gets posted to the DoL website.

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The updated procedures, which limit reporters to using only paper and pen in lockups, “will strengthen the security of our data and offer the general public equitable and timely access,” Bureau of Labor Statistics Commissioner William Beach said in a news release.

The BLS cited a 2014 report in which the Labor Department’s inspector general warned that media organizations are able to “profit from their presence in the lock-up by selling, to traders, high-speed data feeds of economic data formatted for computerized algorithmic trading.”

“Developments in high-speed algorithmic trading technology now give a notable competitive advantage to market participants who have even a few microseconds head start,” the bureau said on Thursday.

Reuters, however, reported that it was “unclear whether removing computers from the ‘lockup’ room would stop algo traders from accessing the data quickly. Some media organizations have complained that high-speed traders were getting the data from the government agencies’ websites through a technique called scraping ahead of the time it was released in the lockup.”

The Commerce Department said it would release its reports, including quarterly GDP data, under the Labor Department’s new guidelines.

“That’s nuts. What’s the next step, make you chisel out your stories on stone tablets which are then to be distributed via oxen-drawn carts?” one economist told MarketWatch.

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