On Thursday, December 20th, MFA and AIMA filed additional comments with the SEC on market data. Our letter addressed assertions made by exchanges and at the SEC Roundtable on Access to Market Data and Markets. We raised concerns that segmenting the market for market data as a “luxury” good:
- Harms the ability of small broker-dealers to compete with large broker-dealers for order execution,
- Limits investor choice with respect to broker-dealers that provide order execution services, and
- Limits the ability of investors to obtain relatively basic data such as odd lots, and runs counter to achieving one of the purposes of a national market system, which is “[a]n opportunity . . . for investors’ orders to be executed without the participation of a dealer.”
In our letter, we also supported views expressed at the SEC Roundtable that core data should be modernized to include more information and that the Commission should amend Regulation NMS in this respect. Finally, we raised concerns regarding the fairness and reasonableness of market data fees and urged the Commission in assessing whether market data fees are “fair and reasonable and not unreasonably discriminatory” to consider:
- Whether fees are fair and reasonable on the basis of market participants by class as opposed to total fees paid across the industry;
- Whether the fees are designed to ensure the broadest distribution of the market data;
- Whether the fees are tied to some type of cost-based standard; and
- Whether the data usage for which market participants are being assessed have any bearing on an exchange’s costs.
Attached is a copy of the MFA-AIMA letter on the SEC Roundtable on Market Data, which includes a copy the Associations’ petition to the SEC from earlier this year.