Joint Letter to the SEC on the New Consolidated Data Plan
February 28, 2020
On February 28, MFA-AIMA submitted comments to the SEC in response to its notice (“Proposed Order”) regarding a new public equity market data plan (“New Consolidated Equity Market Data plan”) with a reformed governance structure. In general, the Associations were in support of the SEC’s New Consolidated Equity Market Data plan, but shared concerns raised by Commissioners Allison Lee and Robert Jackson with respect to the inherent conflicts of interests from exchanges both operating public data feeds and selling proprietary data feeds. In our letter, we:
- Supported consolidating the current three existing equity data plans into one New Consolidated Data Plan.
- Supported the Proposed Order’s terms to include non-SRO members (i.e., institutional investors, BDs and other participants) on the operating committee of the New Consolidated Data Plan.
- Supported the Proposed Order’s proposed operating committee voting framework, which would provide the aggregate number of votes to non-SRO members to be one half of the aggregate number of SRO member votes. We raised concerns for the need for additional clauses in the Proposed Order to mitigate conflicts of interest regarding market data fees.
- Raised the need for the New Consolidated Data Plan to make clear that one of the primary goals is to assure reasonable fees that promote the wide public availability of consolidated market data; and the need to make clear that fees should be related to the cost of production, aggregation and distribution, rather than based on user value.
- Supported provisions requiring an independent plan administrator, conflicts of interest policy and confidentiality policy.