SEC says market data review to come, but not yet

NEW YORK Thu Mar 3, 2011 8:58pm GMT

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NEW YORK (Reuters) - Market data, a perennial thorn for the U.S. securities industry, has not been addressed as regulators deal with implementing Dodd-Frank and other reforms, but its day will come, top U.S. regulators said.

Issues related to proprietary data feeds and concerns about delays in the dissemination of the consolidated tape need to be addressed, SEC Chairman Mary Schapiro told the Reuters Future Face of Finance Summit.

TD Ameritrade Holding Corp (AMTD.O), a large U.S. online brokerage, in January urged the SEC to conduct a full review of market data, including the Consolidated Tape Association, which governs the consolidated tape and its cost structure.

Schapiro told the summit that she had not had the time to give much thought to market data issues, but they should be addressed.

"In the context of looking at the consolidated audit trail, looking at issues about proprietary data feeds and latency in the consolidated tape, those are issues that we'll need to get into," Schapiro said. "But I can't tell you I have thought a lot about the economics of it at this point."

Rick Ketchum, chairman and chief executive of broker watchdog Financial Industry Regulatory Authority, said the pay structure of the consolidated tape is a consistent sore point for the industry, but not a priority.

"I wouldn't think that would be high on my priority list of things that are critical to do," Ketchum told the summit.

However, Ketchum said market data could always be used to fund market surveillance.

"I am interested that there is some money in an intensely competitive environment to fund market surveillance and efforts to ensure market integrity," he said.

TD Ameritrade wants to renew a debate over market data that sparked an SEC concept release in 1999 and an advisory committee on market data that was chaired in 2000 and 2001 by Joel Seligman, a leading authority on securities regulation.

The CTA is made up of FINRA and 13 U.S. exchanges.

How pricing is set for market data is being litigated before the U.S. Court of Appeals for the District of Columbia Circuit in cases that involve Nasdaq OMX's (NDAQ.O) Nasdaq Stock Market and NYSE Arca, a unit of NYSE Euronext NYX.N, operator of the New York Stock Exchange.

NYSE declined to comment and Nasdaq did not immediately respond to a request for comment.

(Reporting by Herbert Lash; Editing by Phil Berlowitz)

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