SEC Will Review New NYSE Data Fee
The Securities and Exchange Commission is reviewing its approval of a rule allowing the New York Stock Exchange to charge for market quotes that once were free, after receiving protests from Internet companies including Google and Yahoo .
The regulator on Dec. 27 granted a request from NetCoalition to review its staff's approval of the NYSE charging for distribution of quotes on its Arca electronic exchange. The regulator said it would accept comments on the proposal for 21 days.
NetCoalition -- whose trustees include CNET Networks, Bloomberg, Google, Yahoo and IAC/Interactive -- said in a statement that its members and "many millions of public investors who access their Web sites daily have been and will be injured by the unreasonable fees permitted by the staff's approval of the rule change."
The Washington-based lobbying group also asked the SEC for a broad review of how U.S. stock exchanges charge for market data and suggested that other pending fee proposals be stayed pending final review.
An SEC spokesman said the review applies only to the Arca proposal, known as Rule 431. NYSE spokesman Richard Adamonis declined comment.
The new NYSE fees have not yet gone into effect, and will be stayed pending final review, the SEC said.
NetCoalition's intervention has sent chills through the exchange community. Fees from market quotes and related data typically provide about 10% of revenue for both NYSE Group and Nasdaq Stock Market, and more at regional exchanges such as the Philadelphia Stock Exchange and Chicago-based National Stock Exchange.
Exchanges sell trading and related analytic data to securities firms, third-party distributors and operators of Web sites, some of whom have stopped publishing live quotes because of rising fees. The U.S. Chamber of Commerce has in the past objected to rising market data fees, as have some securities industry firms and trade groups.
Time Warner's AOL unit stopped displaying real-time data on Sept. 1 after exchanges began charging $1 per month per viewer of their electronic marketplace data. AOL is not a member of NetCoalition.
The trade group said the SEC's Division of Market Regulation failed to recognize the impact of the new NYSE proposal, which would impose a fee of at least $5 a month per viewer of its Arca data.
The proposal "imposes fees that put access to the NYSEArca quotations beyond the reasonable economic reach of an advertiser-supported medium like the Internet," NetCoalition wrote in requesting the review.
The Washington-based lobbying group also urged the SEC to restrict its staff from approving rules "by delegated authority," meaning without a full vote of the regulator's five commissioners, when the changes have been "the subject of substantial adverse public comment."
NetCoalition Executive Director Markham Erickson said in a phone interview he's pleased by the SEC's initial action because he believes it rarely reviews actions by its staff.