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SEC issues landmark order rejecting Nasdaq and NYSE Arca market data fee increases

SEC issues landmark order rejecting Nasdaq and NYSE Arca market data fee increases To explain an October 16, 2018 US Securities and Exchange Commission order that unanimously upheld a SIFMA challenge to fee increases for “depth-of-book” market data filed by Nasdaq and NYSE Arca and the SEC’s simultaneous remanding of over 400 market data fee and other filings back to the exchanges for consideration under the standards set out in the order.Design/methodology/approachExplains the criteria for fee increases under the Exchange Act, the SEC’s historic routine approval of exchanges’ proposed fee increases, the SEC’s challenge to two recent market data filings, and the SEC’s remanding of 400 additional market data fee filings challenged by SIFMA to the exchanges and the National Market System (NMS) for reconsideration. Analyzes and discusses the SEC’s order.FindingsThe SECs’ SIFMA order appears to raise the bar significantly for what exchanges must show to justify fee increases.More broadly, all five SEC Commissioners (of both parties) appear to be rethinking the role of for-profit exchanges in the regulatory structure.These orders have the potential to rewrite the regulation of market data, other exchange fees, and potentially the relationship between the exchanges and other market participants, for the entire securities industry.Originality/valuePractical guidance from experienced securities lawyers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Investment Compliance Emerald Publishing

SEC issues landmark order rejecting Nasdaq and NYSE Arca market data fee increases

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Publisher
Emerald Publishing
Copyright
© Sidley Austin LLP.
ISSN
1528-5812
DOI
10.1108/joic-02-2019-0012
Publisher site
See Article on Publisher Site

Abstract

To explain an October 16, 2018 US Securities and Exchange Commission order that unanimously upheld a SIFMA challenge to fee increases for “depth-of-book” market data filed by Nasdaq and NYSE Arca and the SEC’s simultaneous remanding of over 400 market data fee and other filings back to the exchanges for consideration under the standards set out in the order.Design/methodology/approachExplains the criteria for fee increases under the Exchange Act, the SEC’s historic routine approval of exchanges’ proposed fee increases, the SEC’s challenge to two recent market data filings, and the SEC’s remanding of 400 additional market data fee filings challenged by SIFMA to the exchanges and the National Market System (NMS) for reconsideration. Analyzes and discusses the SEC’s order.FindingsThe SECs’ SIFMA order appears to raise the bar significantly for what exchanges must show to justify fee increases.More broadly, all five SEC Commissioners (of both parties) appear to be rethinking the role of for-profit exchanges in the regulatory structure.These orders have the potential to rewrite the regulation of market data, other exchange fees, and potentially the relationship between the exchanges and other market participants, for the entire securities industry.Originality/valuePractical guidance from experienced securities lawyers.

Journal

Journal of Investment ComplianceEmerald Publishing

Published: Jul 23, 2019

Keywords: Nasdaq; NYSE Arca; US Securities and Exchange Commission (SEC); Depth-of-book market data fee increases; National Market System (NMS); Securities Industry and Financial Markets Association (SIFMA)

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