Market data is the information on quotations and trades in each of the thousands of securities traded daily in U.S. financial markets. Market data is essential to enabling investors to make informed decisions on securities transactions.
There are several forms of market data provided by national securities exchanges. The most basic is the “best-priced” quotation and “last-sale” data for a given security. According to U.S. Securities and Exchange Commission (SEC) rules, the exchanges must provide this information to a central processor for consolidation and distribution. However, there is currently no SEC rule requiring distribution of a second type of market data known as “depth-of-book.” Depth-of-book data shows bids to buy at prices below, and offers to sell at prices above, the National Best Bid and Offer (NBBO). Providing a measure of the depth of the market for a security is essential to inform investors as to the prices at which their orders will be executed, should the order size be larger than the quoted size in the NBBO.
SIFMA believes new market data fees would significantly limit the number of market participants able to access depth-of-book data. Furthermore, SIFMA agrees with the U.S. Court of Appeals for the D.C. Circuit that there was insufficient evidence to support the SEC determination that significant competitive forces justified recent price increases.