11.02.2018

SIP Reform Outlook Unclear

11.02.2018

Updates to the Securities Information Processor probably will not happen in the near term, according to Cboe Global Market officials.

The SIP is a frequent lightning rod for brokers and institutional investors, who say exchanges purposely keep the baseline data product wanting in order to prop up demand for premium data feeds. Exchanges say SIP is a useful product for investors who don’t need a lot of fast data.

There are only two methods to expand the governance of the SIP as well as incorporating additional data, such as depth-of-book, said Chris Concannon, president and COO of Cboe Global Markets, during the exchange operator’s third-quarter earnings call on November 2.

Chris Concannon, Cboe Global Markets

“It would require major SEC rule writing to change the structure of the SIP, which is one option. The second option is the industry, and the exchanges come to the table and achieve some compromise on the new structure. That would require all of the exchanges to submit an NMS filing under the plan for the SIP, and each exchange would have to agree to those new structures.”

Although Concannon was encouraged by the various exchange operators’ openness to compromise on the SIP’s future during the recent industry roundtable hosted by the SEC’s Division of Markets and Trading, the current litigation between the sell side and the exchanges make it difficult to negotiate.

“If you are involved in litigation, you are going to be very cautious to compromise with the same parties that are filing briefs against you in litigation,” he said. ” And if there are continued assaults on the exchanges, it is hard for us to come to the table feeling in the mood to compromise. We’re at a difficult time.”

The Cboe expects that the litigation would likely take years to resolve, noted Ed Tilly, CEO of Cboe.

“We stand by our products and fees and hope that the SEC roundtable clarified some of the misunderstandings concerning exchange market data feeds,” he added.

Concannon suggested that things might be more productive if those attacking the exchanges lower their public attacks a notch and move the discussions out of the public forum and have an open dialog behind closed doors.

In the meantime, Cboe management expects to continued downward pressure on SIP market data revenue, absent of audit recoveries, due to industry consolidations and historical trends, according to Brian Schell, executive vice president, CFO, and Treasurer at Cboe.

“I don’t think any of the exchanges, except for the IEX that is new to the SIP, look at that revenue as a long-term growth driver for our businesses,” said Concannon.

🏆 The 2026 Global Markets Choice Awards are here! 🌍 Nominations are officially OPEN for the celebration of excellence in global capital markets trading & technology. Nominate below:
https://www.jotform.com/form/260086385121150

Delaware Life Insurance Company is becoming the first insurance carrier to offer an index that contains cryptocurrency, adding the BlackRock U.S. Equity Bitcoin Balanced Risk 12% Index to its fixed index annuity (FIA) portfolio.

As the digital assets industry pushes toward

Franklin Templeton is expanding its tokenized fund suite, signaling growing institutional demand for blockchain-based fund infrastructure and regulated investment products moving onchain. Read the full article below:

$50 billion in active ETF inflows helped fuel a record year for @BlackRock 's iShares business, as investors continue to lean into active strategies.

Load More

Related articles

  1. The contracts will track CME FutureSports Performance Indexes of the 30 professional baseball teams.

  2. Securitize Stocks are structured to preserve the investor rights and economic benefits associated with shares.

  3. Clock Synchronization: A Matter of Timing

    The companies aim to support market innovation and enable 24/7 trading of equity futures.

  4. The hub brings greater automation, standardization, and connectivity to ETP primary market workflows.

  5. Enhancing Options Liquidity

    The firm will soon connect U.S. and global crypto derivatives into a single regulated liquidity pool.