SEC Issues Decision on Market Data Fees and Market Structure

The SEC issued an opinion and order regarding several administrative proceedings that at least temporarily rejected increases in market data fees.

As previously covered, SIFMA filed charges against NYSE Arca, Inc. and the Nasdaq Stock Market LLC (collectively, the "exchanges"), alleging that the exchanges were not justified in levying fee increases for proprietary equity market data due to a lack of competition. An administrative law judge dismissed the case in 2016, but it was later appealed (seeSEC order dated July 19, 2018). While SIFMA's first challenge was still pending with the SEC, SIFMA and Bloomberg L.P. filed over 400 other challenges to market data and market access fees.

The SEC has now issued a narrow ruling that will allow the exchanges to exact data-fee increases only if they can demonstrate that the fees for market data are (i) "constrained by significant competitive forces" or (ii) related to the exchanges' cost. Following this ruling, the SEC remanded the challenges to the fee increases.