Tech companies’ increasingly heavy rotation into the financial sector is creating market distortions in data service provision and pricing, leading industry players warned, calling on EU regulators to tighten scrutiny on the data space.

A chorus of incumbent, alternative and fintech players alike raised flashing red flags about unregulated data providers and distributors concentrating financial market power thanks to their ability to bypass hefty prudential requirements and dominate the digital space.

The trend would also be pushing several regulated companies to outsource data functions to unregulated entities in order to ease the burden of regulatory compliance, financial associations and groups warned responding to the European Securities and Markets Authority (ESMA)’s consultation on digital finance.

“The majority of financial market data is consumed through…

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