01.08.2018

Exchanges Win on Market-Data Ruling

And it is the exchanges that prevail in the market data pricing and competition debate.

In a recent judgement and decision from Securities and Exchange Commission Administrative Judge Brenda Murray, she ratified a June 2016 decision that exchanges’ market data businesses are subject to competitive forces. Her decision, reported first by S&P Global Intelligence, effectively could bring to a close the nearly two-year battle between the brokers and the New York Stock Exchange and Nasdaq regarding pricing of data.

The case, first brought by the Securities Industry Financial Management Association (SIFMA) argued broker/dealers were being charged unreasonable prices for the exchanges’ market data feeds. The argument was rooted in the fact that since the different feeds offered by the exchanges cover different data sets and all feed data is necessary for brokers to route order in compliance with best ex mandates, feed prices were unconstrained by competition.

However, in June 2016, Judge Murray ruled in favor of the exchanges, writing that their depth-of-book prices are constrained by a client’s ability to switch to another exchange’s product. Soon after the ruling, the SEC granted SIFMA an appeal to the decision, but when Murray requested any new evidence from SIFMA, Nasdaq and the New York Stock Exchange in December 2017, the three parties declined to do so.

And that is as they say, is that. Case ended.

S&P reported that SIFMA, NYSE and Nasdaq all declined to comment on the matter.

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