The SEC has unanimously ruled against Nasdaq and NYSE in a 12 year dispute over the exchanges' desire to raise prices when selling market data to Wall Street banks and traders. The ruling casts doubt on a source of revenue that has helped substitute for declining trading-fee income.
The SEC’s decision sided with the Securities Industry and Financial Markets Association, or Sifma, a major financial-industry trade group that had accused the exchanges of “exploiting their monopoly over market data.” Brokers say big and small investors alike will benefit if regulators rein in skyrocketing market-data costs. The SEC also put into limbo over 400 other market-data fee increases that were challenged by Sifma. The regulator didn’t reject those price increases but told the exchanges to review brokers’ complaints that they undermine competition, giving the exchanges a year to complete the effort. The move puts pressure on the stock exchanges to restrain fees or disclose more about why they are necessary, which exchanges have historically resisted.