|The Jolly Contrarian’s Dictionary |
The snippy guide to financial services lingo.™
Information /ɪnfəˈmeɪʃ(ə)n/ (n.)
(1) That which is conveyed or represented by a particular arrangement or sequence of things.
(2) A mathematical expression of the probability of occurrence of a particular sequence of symbols, as against that of alternative sequences.
(3) Really hard to define non-circularly, but know know it when you see it.
(4) A will o’ the wisp ephemerality which, since being unshackled from its imprisoning substrate, has been equally powering and poisoning the world.
The difference between information and data
Information is a organised data, over which some bright spark has laid a narrative structure so that it is contextualised and is useful.
Data is an individual unit that contains raw material which does not carry any specific meaning.
It is very, very hard to strip all narrative meaning from data, because we are, in Jeremy Lent’s excellent term, pattern recognising machines. The best we can do is binary code. White noise.
Is it my data?
A legal distinction worth bearing in mind between:
- “copyright” is a statutory right which applies to certain types of “created” information automatically, investing in their author some proprietary rights to stop other people reproducing the creation. It does not apply to all kinds of information - the information must have been “created”. Numerical data (like execution prices) are not capable of protection by copyright. You can acquire “database copyright” which derives from the effort you have taken to compile a database of execution prices. But you couldn’t stop another party compiling an identical database by itself: if your counterparty itself compiles its own database of the same material, it would have copyright in its database, and you in yours.
- “information” which can be any kind of information, including data. Parties can make any agreement about who can do what with any type of information, whether or not they own it or whether it is copyrightable. So for example, a client could say “I will only give you my business if you agree not to use any information you derive from by trade data for any purpose other than reporting to me and complying with applicable law.” This is a contractual right, not a statutory one, but the client can only enforce it to the extent it can prove that it has suffered a loss. Generally that would be pretty hard to do.
- regulatory/legal considerations: You cannot give non-public information to a third party if that would amount to inside information, or facilitate market abuse (e.g., front running). So if the information identifies a client somehow, especially if it allows prediction of client trading behaviour, you may have a big problem.
- reputational/franchise considerations: Even if there are no legal, contractual, regulatory or criminal sanctions against it, if the client would be annoyed about it and withdraw their business, it’s just as big a problem.