Reuters challenges existing code of conduct on RICS

Having been charged with playing dirty in its battle with Bloomberg, Reuters is now accused of shooting itself in the foot by upsetting its clients.

'It's bloody stupid,' spluttered a SAR brokerage source. 'They are cutting off their own nose to spite their face.' RICs are used to identify securities. They can be keyed into Reuters terminals or used with Reuters software to bring up displays on securities.

In Asia in particular they have become an industry standard and brokers insert the codes in research after naming companies as a help to clients who may want to cross check on their Reuters terminal.

For years, Reuters never batted an eyelid about the practice - after all it could be viewed as free advertising.

Now they see things differently and are considering taking action to prevent the use of RICs outside of their own products.

'Reuters Instrument Codes have always been proprietary information to us. It is our intellectual property,' sniffed a Reuters spokesman in London.

The change of heart was prompted by the proliferation of sources of financial information through the Internet and in-house intranets, he said.

Reuters director of commercial policy John Adams was to make a pronouncement on the issue in two or three months after a review and sounding out clients, the spokesman said.

The industry is not so sure about the sounding out. One delegation of brokers is said to have been turned away from Reuters' London headquarters when they came to protest.

Bloomberg founder Michael Bloomberg once said of Reuters: 'They have more money than God.' Now brokers think Reuters is acting like God.

What is particularly bugging the brokers is the prospect of having to reconfigure their databases to whip out the codes, something that could consume expensive man-hours.

It is not only the brokers that may suffer. Companies such as First Call, which acts as an electronic conduit for brokers to get their research to financial institutions is also worried.

In a letter to brokers, First Call said dropping Reuters' codes 'will have a huge impact on both of our businesses'.

First Call distributes 2,000 reports from 300 broker clients every day and bases its research database on RICs.

'It's a concern, but at the moment there is not much happening with regard to the resolution,' said Fran Thompson, First Call general manager in Hong Kong.

The RIC spat follows Reuters being sued twice last year over allegations that it nicked software from its rivals.

First a US grand jury investigation was called after Bloomberg claimed that a US subsidiary of Reuters had indulged in industrial espionage and stolen data from the US firm's killer bond-dealing system.

Then All-Media Typlan, a Swiss software company, filed an action in a federal court in New York claiming Reuters had used All-Media products without a licence.

The action was brought under America's Racketeer Influenced and Corrupt Organisations Act, known as a Rico suit.

As angry brokers wonder if Reuters is taking the mick over RIC, they may decide that Reuters' desktop system will become a dustbin system.

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