ALBANY, N.Y. (AP) — PR Newswire, which distributes announcements and press releases about earnings and other business developments, announced Wednesday that it will require recipients of its primary feed of information to certify that they won't use the data in high-frequency trading.
The company said it is also recommending that clients intending to release information at the close of the markets do so at 4:01 p.m., to ensure that high-frequency traders can't trade on the news in the milliseconds after the closing bell at major U.S. stock exchanges.
Chief Executive Ninan Chacko said PR Newswire, since its inception, has worked to establish practices to provide news to shareholders and the public equitably.
"We never did sell information to high-frequency traders," Chacko said. "This is in keeping with our existing practices."
High-frequency traders can use information in the milliseconds before it becomes widely available to other investors, "effectively skimming from the rest of the investing public," said New York Attorney General Eric Schneiderman, who collaborated with PR Newswire ahead of the announcement, the company said.
Schneiderman's office reached earlier agreements with Business Wire and Marketwired to stop providing market-moving data to high-frequency traders, and Schneiderman said Wednesday's agreement with PR Newswire is another step toward curbing the practice.
PR Newswire has fewer than 20 recipients of its direct data feed, mainly media companies and including The Associated Press, Chacko said. Its wider distributions can go to hundreds and even thousands of places in the media, he said.
PR Newswire is "going the extra mile to ensure its service is not abused by high-frequency traders — at any time during the trading day and in the moments after the closing bell," Schneiderman said.