August 14, 2020

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

Re: SIFMA Supplemental Comment Letter on Request for Information and Additional Comment on a Proposed Rule Change to Establish Fees for the NYSE National Integrated Feed: File No. SR-NYSENAT-2020-05 (“Proposal”)

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 submits this letter to the U.S. Securities and Exchange Commission (“Commission”) to supplement our prior comments in response to the Commission’s request for additional information (“RFI”) on the Proposal to establish market data fees by NYSE National, Inc. (“NYSE National”).2 SIFMA previously submitted a comment letter on July 10, 2020 on the RFI (“July 10 Letter”) and subsequently spoke with the Commission staff in the Division of Trading and Markets on July 14, 2020 regarding our comment letter.3 Based on that discussion, SIFMA is providing additional information that further supports our position that the Commission should not approve NYSE National’s Proposal to establish market data fees for the exchange’s market data.

NYSE National’s Platform Competition Argument is Flawed

As we noted in our July 10 Letter, SIFMA does not agree that exchanges are platforms for market data and transaction services and competition for order flow on the trading side of the platform acts to constrain the pricing of market data on the other side of the platform. The actions of broker-dealer consolidators of order flow are but one example of why this platform theory put forward by the exchanges is flawed. In particular, direct feeds from individual exchanges are not fungible and broker-dealers feel obligated to obtain direct feeds across multiple exchanges to have the most robust view of the market, regardless of a given exchange’s market share. While not explicitly mandated by regulation to use direct feeds, a large number of broker-dealers feel that this is necessary for competitive and/or best execution reasons. On the competitive front, many investment managers require that the broker-dealers handling their order flow must subscribe to each exchange’s proprietary feed.

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 See, Securities Exchange Act Release No. 89065 (June 12, 2020) 85 FR 37123 (June 19, 2020).
3 See, Memorandum from the Division of Trading and Markets regarding a July 14, 2020, meeting with representatives of the Securities Industry and Financial Markets Association.