U.S. court sides with SEC on market data overhaul in blow to big exchanges

div classBodysc17zpet90 cdBBJodivpBy John McCrankp

pNEW YORK Reuters – A U.S. appeals court on Tuesday said the Securities and Exchange Commission can proceed with its overhaul of the way essential stock market data is collected and disseminated, striking a blow to exchanges that earn revenue from the data and had opposed the plan.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pThe SEC in 2020 approved new rules governing public data feeds that it said would also improve transparency and address inefficiencies in the collection and dissemination of the data, following years of complaints by brokers that the exchanges that control the data are conflicted in their role.p

pNasdaq Inc, Intercontinental Exchange Incs NYSE unit, and Cboe Global Markets, opposed the plan, which allows firms other than the exchanges to develop and sell data products based on data obtained from the exchanges. p

pThe exchange groups, which together run 12 of the 16 U.S. stock exchanges, argued the new rules were contrary to the goals and policies of the Securities Exchange Act. p

pIn denying the exchanges petition against the SEC, a threejudge panel on the U.S. Circuit Court of Appeals for the District of Columbia said the SECs rule “clearly represents a reasonable balancing of the objectives Congress directed the Commission.”p

pThe exchanges were put in charge of the data feeds, which show current best prices and last trades for stocks, before they were forprofit companies and the rules were last updated in 2005. p

pSince then, exchanges have created faster, more sophisticated proprietary data feeds that compete against the public feeds. Many larger brokers say they need to pay for those private data feeds, often more expensive than the public ones, in order to remain competitive, and that this has created a twotiered market.p

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pp Reporting by John McCrank Editing by Bernadette Baump

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