The Securities and Exchange Commission (SEC) is investigating the relationship between Thomson Reuters and The Institute for Supply Management, following a report of a data leak.

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The market regulator is looking into why certain clients of Thomson Reuters received and traded on the ISM’s manufacturing data ahead of its official release earlier this month.

The two entities have an arrangement to publish market-moving manufacturing data that is generated by ISM and published to high-speed data clients by Thomson Reuters.

Earlier this month, ISM’s influential manufacturing data was inadvertently sent out early to its high-speed clients. These small groups of traders received the data milliseconds before the rest of Wall Street. Since the data was disappointing, the traders made rapid-fire, aggressive bets against the market. The traders used sophisticated computer trading systems to process and trade on the information.

There was a sharp market reaction to that burst of trading, which prompted downward moves in the SPY ETF, which serves as an investing tool for traders to bet on the overall direction of the market. That downward surge came 15 milliseconds ahead of the official release time for the data.

SEC Sought Copy of Contract

A spokesman for Thomson Reuters, Lemuel Brewster, said that the company received a phone call from the SEC. regarding the premature release and explained to the agency that the early release was due to a “clock synchronization issue.”

As the SEC sought a copy of the contract with ISM, the Thomson Reuters spokesman said that after obtaining consent from ISM, they have voluntarily provided a copy of the contract, masking the pricing details.

Premium for Faster Information Delivery

Peter Lattman and Nathaniel Popper in their report for Dealbook observe market data providers, including the exchanges, now charge premiums to disseminate information delivery faster besides offering high speed trading. The regulators have to grapple with such recent changes in the market and wondering whether the level playing field is unfairly tilted in favor of an elite group of traders subscribing to such premium services.