08.19.2016

SEC to Review Ruling on Exchange Pricing Case

(This article first appeared on SNL.com)

The SEC granted the Securities Industry and Financial Markets Association’s petition for review of a ruling that found that the market data fees charged by Nasdaq Inc. and Intercontinental Exchange Inc.‘s NYSE Arca do not violate the Securities Act.

SIFMA and some broker/dealers have argued in the lawsuit that Nasdaq and NYSE Arca could indiscriminately increase their market data fees for their depth-of-book market data products because the products are not subject to competition. However, Judge Brenda Murray ruled that the products were subject to competitive forces as customers were able to choose another data product when faced with higher fees.

In its petition for review, SIFMA said the decision was incorrect, insisting that the exchanges “have significant market power, which they exploit to the detriment of investors, the financial markets, and the public interest.”

“We are pleased that the administrative law judge found that setting prices for the sale of aggregated market data is fair, transparent and competitive. The NYSE and its parent ICE will continue to offer competitively priced market data services that customer’s value and demand,” a NYSE spokesperson said in an emailed statement.

A Nasdaq spokesperson declined to comment.

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