MFA & AIMA Submit Market Data Petition and Request for Guidance

MFA and AIMA filed a petition with the SEC to initiate rulemaking proceedings regarding market data, and requested the SEC to initiate certain regulatory actions, issue guidance, and conduct a study with respect to market data licensing practices and fees of exchanges and securities information processors.

The Associations are concerned that the way in which the current regulatory framework for proprietary exchange market data and consolidated market data is implemented fails to protect investors from unreasonable fees, unreasonably discriminatory pricing, and in some cases, fees that may be imposing an unnecessary and inappropriate burden on competition.  The Associations respectfully urged the Commission to begin rulemaking and other actions to reform the approval process for determining proprietary and consolidated market data fees.

The Associations requested that the Commission:

  • Request financial information from exchanges on market data operating costs and revenue to ensure that fees are reasonable and not unreasonably discriminatory.
  • Require that exchanges file more detailed rule filings with respect to market data fee schedules in terms of definitional specificity.
  • Conduct more rigorous reviews of rule filings to determine whether rule filings concerning market data fees, licensing terms and auditing practices meet the Sections 6 and 11A requirements of the Exchange Act, including the equitable, fair, and reasonableness standards.
  • Promulgate rulemaking requiring an exchange to submit to the Commission adequate financial information regarding market data operating costs and revenue in rule filings to justify fee schedule changes.
  • Conduct a cost-based review of SIP plan fees, and request that SIP plan participants file SIP Plan operating costs and revenue with joint-industry rule filings (and make such information public).
  • Promulgate rulemaking to amend Regulation NMS to allow for public notice and comment prior to the Commission’s approval or disapproval of SIP plan fee changes.
  • Work with exchanges and the public to issue guidance on general standards with respect to market data licensing practices and terminology.
  • Work with European regulators and through IOSCO to develop guidance with respect to market data licensing practices and terminology used by exchanges for basic market data products.
  • Conduct a study on ways to reform the U.S. equity market data regulatory framework with respect to proprietary market data and the consolidated data processor model and its governance.