Over the past year or so, I’ve been tracking the efforts of the Securities and Exchange Commission (SEC) to break what it sees as the monopolistic stranglehold of the large exchanges on the cost of US equity market data and infrastructure, and update the public data feeds known as the exclusive Securities Information Processors (Sips).
These efforts took the form of two main initiatives, rolled out mainly in 2021. One is the Market Data Infrastructure Rule (MDI Rule), which attempts to create a business environment where competing Sips could arise to offer US equity market data, leveraging their unique strengths and providing differentiated products. The other is the Consolidated Tape Plan (CT Plan), which ordered the big exchanges to draw up a plan to run the exclusive Sips that gives voting power to non-exchange market participants on the plan’s operating committee. The CT Plan further dilutes the big exchanges’ voting power on this committee by assigning votes to each exchange group rather than per medallion.
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