Leaked audio from the Bank of England gave hedge funds an 8-second head start on Mark Carney's statements
- The Bank of England says it is investigating how hedge funds were able to pay thousands of pounds to listen to broadcasts of its briefings before they were made public.
- The misused audio of briefings gave the traders a head start of a few seconds on market-moving information, The Times reported.
- The central bank discovered an audio feed handled by one of its third-party suppliers was "misused" and shared with a market news service, which sold access to traders for £2,500 to £5,000 ($3,278 to $6,555) per press conference on top of a subscription fee, the newspaper said.
- "This wholly unacceptable use of the audio feed was without the bank's knowledge or consent, and is being investigated further," the BOE said in a statement.
- View Business Insider's homepage for more stories.
The Bank of England says it is investigating after a report that hedge funds paid for access to briefing broadcasts that the rest of the public heard on a delay, giving the traders early access to market-moving information.
The central bank discovered one of its third-party suppliers was misusing an audio feed of its press conferences and distributing it to high-speed traders, following inquiries by the Times of London.
The feed gave the traders a head start of up to eight seconds on rivals watching the official broadcast, The Times reported.
Comments made by the bank's governor, Mark Carney, and other senior officials often move pound and bond markets. In the algorithm-driven world of trading where buying and selling occurs in tiny fractions of a second, eight seconds can be a significant leg-up in gaining an edge.
"We have recently identified that an audio feed of certain of the Bank press conferences - installed only to act as a back-up in case the video feed failed - has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients," the Bank of England said in a statement.
The unnamed supplier shared the feed with a market news service that sold access to traders for £2,500 to £5,000 ($3,278 to $6,555) per press conference on top of a subscription fee, The Times reported.
The Bank of England has disabled the supplier's access to the audio feed, it said. "This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further."
The third-party supplier "will no longer play any part in any of the Bank's future press conferences," the BOE said.
The bank added the decisions of its policy committees weren't compromised by hackers. It is scheduled to set UK interest rates today for the final time this year, although no changes are expected.
Here is the Bank of England's statement in full:
"Following concerns raised with the Bank, we have recently identified that an audio feed of certain of the Bank press conferences - installed only to act as a back-up in case the video feed failed - has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients. This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further.
On identifying this, the Bank immediately disabled the third party supplier's access. As a result, the third party supplier did not have any access to the most recent press conference and will no longer play any part in any of the Bank's future press conferences.
The Bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees. The issue identified related only to the broadcast of press conferences that follow such statements."
