INCUMBENT NATIONAL EXCHANGES HAVE CONTINUED TO INCREASE ALREADY-HIGH FEES .
JERRY AVENELL , CO-HEAD OF SALES , BATS EUROPE
venues flexibility to price market data differently .
“ Some may charge clients more than others , but I think they could do a much better job in building a pricing structure around this . For the prop shop community , they own this data pricing and a big part of the market data . So they are upset that this data is being sold , while also being charged by the exchange ,” he explains .
In this sense , Singh-Muchelle argues that market participants are now beholden to the exchanges , as it actually encourages exchanges to discriminate how the data will be used and therefore increase prices for certain clients .
“ The regulation states that market participants should have non-discriminatory access [ to market data ], but it then goes on to quantify for venues to discriminate how their clients use it ,” Singh-Muchelle explains .
In addition , market participants are sceptical regarding the requirements for exchanges to unbundle pre-trade and post-trade data . In theory this should give customers more flexibility and choice , reducing their market data spends . However , the practice is likely to be very different , according to Singh-Muchelle .
“ You can continue to bundle data from different asset classes ,” he says . “ If I ’ m an asset manager and want to buy exchange traded fund data I have to pay for all the equity data to get it .”
MiFID II also weakens competition between dark and light pools with more trading likely to be forced onto the latter . It is feared that this , again , will likely add to the power of major incumbent exchanges to further raise data fees .
Jerry Avenell , co-head of sales , Bats Europe , believes the larger exchanges have been responsible for forcing much of the unjustified price hikes in recent times .
“ Incumbent national exchanges have continued to increase already-high fees , and over-complicate their market data agreements – normally against a backdrop of falling domestic market share ,” says Avenell .
“ In effect , this means customers have been paying more for less . Our competitors have upped fees despite a plateau in market share . It ’ s worth noting that the majority of incumbent exchanges have seen market share erode in core indices . The LSE , for example , only trades around 40 % of the continuous market in FTSE 100 stocks each day .”
For example , with the anticipated merger of the LSEG and Deutsche Boerse , it will effectively create a monopoly over the production of market data .
Furthermore the $ 5.2 billion acquisition of Interactive Data by IntercontinentalExchange ( ICE ) catapulted the exchange to one of the three biggest data vendors in the world , alongside Thomson Reuters and Bloomberg .
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