Defined as non-traditional data that can be used in the investment process, alternative data has gained increased attention in the investment industry over the last decade. Essentially alternative data has come to describe data outside of market data such as market price data, tick data, volume and fundamental data. Alternative data has been gaining popularity over the last decade with surveys suggesting up to half of buyside funds are using it. Alternative data users were once limited to quant funds, but it is not just buyside firms that stand to benefit from the surging availability of alternative data sources. Very soon alternative data users included other financial services firms and verticals including private equity and corporates (the latter refer to it as “external data”).
Alternative data opens the firm to new opportunities and sources of alpha or insight, but it also potentially opens the firm to new risks. To come to grips with this surging demand, legal and compliance teams on the buyside have had to upskill and educate themselves on considerations unique to alternative data. Compliance teams now need to place much greater emphasis on concepts such as data provenance and anonymization techniques.
This course explores legal and compliance considerations related to the alternative data landscape and provides interesting case studies to illustrate the exciting developments.