September 18, 2019

Via Electronic Mail ([email protected])

Ms. Vanessa Countryman
Acting Secretary
U.S. Securities and Exchange Commission
100 F Street NE., Washington, DC 20549

Re: File No. 4-729: SIFMA Comment Letter on Improvements to the Market Data Structure

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 submits this letter to provide recommendations for the U.S. Securities and Exchange Commission (“Commission”) to improve the current market data system. SIFMA has been extremely active in market data issues for more than a decade by advocating for market data reforms to ensure greater transparency in operations and more reasonable fees. In this area, we have advocated mainly on two fronts: first, the need to reform fees for exchanges’ market data products; and second, the need to address the quality and operation of the Securities Information Processors (“SIPs”). Our recommendations below focus on improving the infrastructure and governance of market data products and fees. In addition, we provide comment rebutting the use of platform theory to demonstrate competitive forces in the sale of market data. Separately, and along with ICI, MFA and CII, we have petitioned the Commission to improve the transparency of market data products and fees.2

I. SIFMA’s Recommendations for Content and Infrastructure Changes to the SIPs

SIFMA recommends that the Commission mandate SIP infrastructure improvements to enhance content and reduce latency. These changes should be made with a view toward making the SIP feeds more useful for a broader spectrum of users, while understanding that, for many users, the SIPs may never be a complete alternative to the exchanges’ proprietary feeds. In our view, these recommendations to address latency and include additional core information would allow a larger subset of market participants to use the SIP for certain of their businesses where they currently see no alternative to using exchange proprietary data.

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1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 Petition for Transparency of Funding of Consolidated Market Data from T.R. Lazo, SIFMA; Susan M. Olson, ICI; Jennifer Han, MFA; and Ken Bertsch, CII dated September 17, 2019.