By market estimates, the global market for alternative data is expected to reach $13.91 billion by 2026, a 77% increase from $3.23 billion in 2022. Hedge funds and other trading firms hungry for any possible edge are driving the demand.

The Securities and Exchange Commission (SEC) has taken notice. Over the last few years, the SEC's top examination priorities have begun to include the use of alternative data, which is generally defined as information not contained in company filings, press releases, analyst reports, or other traditional information sources. This information can range from credit card transactions to app downloads to corporate jet flight patterns but may contain material nonpublic information, also referred to as MNPI. In a risk warning issued in April 2022, the SEC faulted investment advisers for inconsistent or weak due diligence on alternative data service providers, among other concerns.

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