U.S. SEC proposes exchanges seek public consultation on data fee changes

FILE PHOTO: The U.S. Securities and Alternate Fee brand adorns an workplace door on the SEC headquarters in Washington, United States, June 24, 2011. REUTERS/Jonathan Ernst/File Photograph

WASHINGTON (Reuters) – The U.S. securities regulator on Tuesday proposed a change to the way in which trade operators alter their charges, in a transfer geared toward enhancing transparency however which may make it more durable for operators to compete on worth to propel income development.

The U.S. Securities and Alternate Fee (SEC) proposed that operators submit requests to vary charges for such providers as market information and connectivity with different exchanges, after which search trade suggestions earlier than any adjustments may be carried out.

At current, operators – resembling New York Inventory Alternate-owner Intercontinental Alternate Inc (ICE.N), Nasdaq Inc (NDAQ.O) and Cboe World Markets Inc (CBOE.Z) – notify the regulator of price adjustments, which then take instant impact. The system successfully permits operators to compete on worth in actual time.

In Could, the SEC mentioned securities trade operators should do a greater job of describing and justifying their charges after they make a submitting, or else the submitting will likely be suspended for evaluate.

Tuesday’s proposal, which is topic to public session earlier than adoption, comes after a years-long dispute over what many brokers and traders see as hovering prices for providers important for buying and selling, however that are additionally main income drivers for many trade operators.

Exchanges lodge tons of of fee-related filings with the SEC every year. Beneath present guidelines – often called the Nationwide Market System plan, or Regulation NMS – price adjustments grow to be efficient instantly to make sure retail traders get the perfect worth doable. NMS additionally prevents trades being executed at costs inferior to bid and provide costs displayed at different buying and selling venues.

Beneath Tuesday’s proposal, the delay earlier than implementing adjustments may make it more durable for trade operators to compete rapidly on worth, probably limiting future income development.

“The charges charged by NMS plans have an effect on all kinds of traders and market contributors,” SEC Chairman Jay Clayton mentioned in a press release. “This rulemaking will assist make sure that NMS plan price adjustments profit from evaluate and remark by traders and market contributors earlier than these charges may be charged.”

Reporting by Katanga Johnson and John McCrank; Modifying by Michelle Value and Christopher Cushing

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