SEC Pushes Equity Exchanges to Redo Public Market-Data Feeds

The top US securities regulator is asking equity exchanges to revamp how they consolidate and disseminate public stock-trading data.

(Bloomberg) — The top US securities regulator is asking equity exchanges to revamp how they consolidate and disseminate public stock-trading data. 

The Securities and Exchange Commission directed exchange firms and the Financial Industry Regulatory Authority to file a proposal to replace three existing plans that mandate how real-time equity market data is distributed, according to an SEC statement Friday.

“Today’s order addresses conflicts of interest inherent in the current governance structure of the existing equity data plans, and is designed to improve the efficiency” of existing so-called national market system plans, the SEC said in the statement. It’s also aimed at improving “the responsiveness of the plan to the concerns of market participants that are not self-regulatory organizations.” 

The exchanges’ data streams, which include information on market dynamics and certain types of transactions, have been at the center of a years-long battle. In 2020, the SEC passed new regulations to push more of the information into public data feeds, which are cost less and are more standardized.

Read More: Nasdaq, NYSE Dealt Blow in Clash With SEC Over Market-Data Feeds

Data can be a lucrative business for exchange firms that charge for private information, including the New York Stock Exchange, Nasdaq Inc. and Cboe Global Markets Inc. Fees, which help cover the cost of disseminating data, can vary and are often different for professional and non-professional users.

Under the SEC’s new order, market participants were asked to submit a new plan that will be up for public comment. The current systems will stay in place until the revised one becomes effective, according to the statement. 

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.