WatersTechnology: Industry Slams Market Data Fee Filing

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In early 2020, the US Securities and Exchange Commission (SEC) kicked off a project to modernize securities information processors (Sips), the entities that pump out national markets system quote data to consumers. The current Sips, governed by the CTA/CQ and UTP plans, include top-of-book data in their feeds; in the commission’s new and improved world—made a reality by the Market Data Infrastructure (MDI) rule—that “core data” was expanded to also include depth-of-book and auctions information. This data would be disseminated by a new kind of processor: competing consolidators that would bring competition and product differentiation to the public feeds.

Since the MDI rule was passed in December 2020, the current plans had to come up with a plan for how the exchanges would charge the competing consolidators and others for this newly expanded core data. That was due by November 5 of last year. Potential competing consolidators and market data end-users were watching anxiously to see what these proposed fee schedules would do—perhaps these exchanges would offer raw ingredient market data at a fixed price for competing consolidators, and waive redistribution fees for these new Sips. At any rate, would the large exchanges present something that would make becoming a consolidator an attractive proposition?

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