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ICE CEO: High-frequency trading becoming increasingly 'quantitatively oriented'

Intercontinental Exchange Inc. executives believe high-frequency traders are more "quantitatively oriented" today than in the past.

Speed traders have increasingly been interested in certain macroeconomic factors and quantitative data as markets become more and more fragmented, said ICE Chairman and CEO Jeffrey Sprecher on a second-quarter earnings call with investors.

"There's a move from screens to feeds," Sprecher said on the Aug. 3 call. "The Flash Boys kind of phenomenon is being arbitraged out of the market."

As clients look more toward data feeds with quantitatively driven algorithms, the exchange operator has been developing its market data products in response to clients' needs.

For the second quarter, ICE's data services segment recorded revenue of $521 million, up from $497 million a year earlier. The data services segment had the second-highest revenue among the company's individual business lines, only trailing its transactions and clearing business, which brought in net revenue of $817 million for the quarter.

Meanwhile, regulatory changes in the U.S. and the U.K. have continued to fragment markets, which CFO Scott Hill said ICE does profit from but does not support. As regulatory activity increases, clients may be looking more toward products that ensure they receive best execution.

On Aug. 1, T. Rowe Price Group Inc. said it agreed to use ICE Data Services' Best Execution service to help it develop and evaluate trade execution quality and to improve its transaction costs in fixed-income securities.

"The areas where you see more fragmentation, you see our revenues are going faster," Sprecher said.