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Bloomberg: Exchanges Say Some Equities-Data Revenue Declined Over 10 Years

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Mark Dowd

Mark Dowd

A committee of U.S. exchanges including NYSE Group Inc. and Nasdaq Inc. said the revenue earned from data feeds has decreased since 2007, even as traders and banks complain that they are paying too much for vital market information.

Data revenue from NYSE-listed stocks and other venues fell to below $175 million a year in 2017 from a 10-year peak of more than $200 million, according to a statement Thursday. For Nasdaq-listed stocks and others, revenue remained flat at around $120 million a year. The revenue is shared among exchanges and the Financial Industry Regulatory Authority, which also participates in the committee.

The data feeds, called securities information processors, or SIP for short, are a crucial piece of infrastructure that display trade prices and quotes. In addition to the SIP revenue, the biggest exchanges have another key source of data income: private feeds of price information sold for a premium. These feeds include information not available on the SIPs. The exchanges don’t break out revenue from premium feeds in their financial disclosures.

High-speed traders and banks have lamented for years that their costs for data keep increasing. Firms purchasing private feeds from U.S. exchanges to trade stocks for clients, make markets or operate a venue like a dark pool can pay $816,000 per year, according to a 2016 report from Tabb Group LLC, a research and consulting firm. Exchange revenue from data, market access and technology increased by 62 percent in five years, compared with 5 percent growth in trading volume, the Tabb report found.

Bloomberg LP, the parent company of Bloomberg News, is among the companies that have accused exchanges of charging too much for data feeds.

NYSE Group is a unit of Intercontinental Exchange Inc.

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