MEMX, the members’ exchange, has proposed a new pricing model for its real-time equities market data aimed at providing a “significantly less expensive” service to other equities exchange operators.
From 1 April this year, the new pricing model will impose a blanket fee of $0.01 for both professional and non-professional users of top-of-book and last sale market data, subject to approval from the US Securities and Exchanges Commission (SEC).
Data distributors have a different set of fees including $2,000 for external distributors and $10,000 as an enterprise fee for those firms wishing to receive top-of-book or last sale data from an external distributor for distribution to investors.
The exchange said the simplified and low-cost fee plan was aimed at improving the exchange experience for all participants, adding that the publishing of its new fee schedule would allow investors to compare it with other available exchanges in the market.
“By introducing one low price for both professional and non-professional consumers, we hope to democratise access to our market data and minimise the friction for retail brokers associated with categorising investors and how they are using stock exchange data,” said CEO Jonathan Kellner.
MEMX was founded in early 2019 by a group of influential financial services firms including BofA Securities, Charles Schwab Corporation, Citadel Securities, E-Trade, Fidelity Investments, Morgan Stanley, TD Ameritrade, UBS, and Virtu Financial. Since inception it has also received investment from other players including BlackRock, Citigroup, J.P. Morgan, Goldman Sachs, Wells Fargo and Jane Street. It received SEC approval in May 2020 and officially launched in October with 18 investors, 50 members, with the goal of delivering a lower cost, more transparent exchange platform.
“We are excited that MEMX’s operational efficiencies allow us to pass meaningful savings along to the industry in the form of significantly lower market data fees. This is just one of the ways in which MEMX is creating positive change for investors through competition with the incumbent exchanges,” added Kellner.
Market data has been the subject of ongoing debate in the industry for several years now with many participants arguing that exchanges hold a monopoly over the data accumulated on their platforms and consequently overcharge for access to it.
Several of the incumbent stock exchanges in the US including Nasdaq, the New York Stocks Exchange (NYSE) took the US securities regulator to court in February last year following the watchdog’s announcement in the previous December that it planned to expand the data available on real-time consolidated data feeds to include depth-of-book data – previously only accessible through proprietary feeds sold by exchanges.
At the time when the legal action from the three major exchanges was announced, MEMX called their reaction “disappointing”.
MEMX later hit out at the “deeply flawed” proposed changes to US equities data fees by the SEC that followed the saga with Nasdaq, Cboe and NYSE, stating they were subject to a conflict of interest and would further cement incumbent venues monopoly over market data.