Notice2026-06463
Joint Industry Plan; Notice of Filing of Amendment No. 1, and Order Instituting Proceedings To Determine Whether To Approve or Disapprove an Amendment to the National Market System Plan Regarding Consolidated Equity Market Data, as Modified by Amendment No. 1, To Adopt a Fee Schedule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 3, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 64 (Friday, April 3, 2026)</title>
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[Federal Register Volume 91, Number 64 (Friday, April 3, 2026)]
[Notices]
[Pages 17026-17051]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06463]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105125; File No. 4-757]
Joint Industry Plan; Notice of Filing of Amendment No. 1, and
Order Instituting Proceedings To Determine Whether To Approve or
Disapprove an Amendment to the National Market System Plan Regarding
Consolidated Equity Market Data, as Modified by Amendment No. 1, To
Adopt a Fee Schedule
March 31, 2026.
I. Introduction
On December 11, 2025, the Operating Committee \1\ of the Limited
Liability Company Agreement of the CT Plan LLC (``CT Plan'') filed with
the Securities and Exchange Commission (``Commission''), pursuant to
section 11A of the Securities Exchange Act of 1934 (``Exchange Act'')
\2\ and Rule 608(a) of Regulation National Market System (``Regulation
NMS'') thereunder,\3\ a proposal to amend the CT Plan to adopt a fee
schedule (``Fee Proposal'').\4\ The Fee Proposal was published for
comment in the Federal Register on December 31, 2025.\5\ The Commission
received comments on the Fee Proposal, which are discussed below.\6\
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\1\ See Article IV, Sec. 4.1 and Article XIV, Sec. 14.1(c) of
the CT Plan.
\2\ 15 U.S.C. 78k-1(a)(3).
\3\ 17 CFR 242.608(a).
\4\ The Members are: 24X National Exchange LLC, Cboe BYX
Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc.,
Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry
Regulatory Authority, Inc., Investors Exchange LLC, Long Term Stock
Exchange, Inc., MEMX LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
ISE, LLC, Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
National, Inc., and NYSE Texas, Inc.
\5\ See Joint Industry Plan; Notice of Filing of the Second
Amendment to the Limited Liability Company Agreement of CT Plan LLC
to Adopt a Fee Schedule, Securities Exchange Act Release No. 104512
(Dec. 23, 2025), 90 FR 61463 (Dec. 31, 2025) (``Notice'').
\6\ Comments received in response to the Notice can be found on
the Commission's website at: <a href="https://www.sec.gov/comments/4-757/4-757.htm">https://www.sec.gov/comments/4-757/4-757.htm</a>.
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On March 30, 2026, the Operating Committee filed an amendment to
the Fee Proposal and response to the comments (``Amendment No. 1''),\7\
which amended and superseded the Fee Proposal in its entirety, as set
forth in Item II.B. The Commission is publishing this notice to solicit
comments on the Fee Proposal, as modified by Amendment No. 1, and is
instituting proceedings, under Rule 608(b)(2)(i) of Regulation NMS,\8\
to determine whether to approve or disapprove the Fee Proposal, as
modified by Amendment No. 1, or to approve the Fee Proposal, as
modified by Amendment No. 1, with any changes or subject to any
conditions the Commission deems necessary or appropriate.
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\7\ See Letter from Jeff Kimsey, Operating Committee Chair, CT
Plan LLC, dated March 30, 2026 to Vanessa Countryman, Secretary,
Commission.
\8\ 17 CFR 242.608(b)(2)(i).
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II. Fee Proposal
A. Summary of Notice Published December 31, 2025
The Operating Committee filed the Fee Proposal as required by
Article XIV of the CT Plan, which sets out the implementation schedule
for the CT Plan and deadlines for significant milestones. Specifically,
Section 14.1(c) of the CT Plan provides that no later than 12 months
after the Effective Date,\9\ the Operating Committee shall file with
the Commission the proposed fees charged to Vendors and Subscribers for
Transaction Reports and Quotation Information in Eligible
Securities.\10\
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\9\ Capitalized terms that are not defined herein are defined in
the CT Plan. The Effective Date is defined in (b) of the recitals of
the CT Plan as the date when the CT Plan is approved by the
Commission pursuant to Rule 608 of Regulation NMS. Accordingly, the
Effective Date is November 20, 2024. See Joint Industry Plan; Order
Approving, as Modified, a National Market System Plan Regarding
Consolidated Equity Market Data, Securities Exchange Act Release No.
101672 (Nov. 20, 2024), 89 FR 94924 at 94925, 94962 (Nov. 29, 2024)
(File No. 4-757) (``CT Plan Approval Order'').
\10\ Art. XIV, Sec. 14.1(c) of the CT Plan.
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The Fee Proposal seeks to establish the fees to be assessed across
a variety of data products and the definitions to be used for purposes
of distinguishing such products. The Fee Proposal would be used to
assess fees for Transaction Reports and Quotation Information in
Eligible Securities that is collected, consolidated and disseminated
pursuant to the CT Plan once the CT Plan is fully
[[Page 17027]]
implemented.\11\ The Fee Proposal contains, among other things,
proposed definitions and fees for Professional and Non-Professional
Use, proposed Enterprise Caps, proposed Redistributor Fees, proposed
fees for Non-Display Use, proposed fees for Derived Data, and proposed
definitions of Direct and Indirect Access.
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\11\ See CT Plan Approval Order, supra note 9. The Commission
ordered the then-registered self-regulatory organizations (``SROs'')
to act jointly in developing and filing with the Commission a
proposed new national market system plan to govern the public
dissemination of real-time, consolidated equity market data for NMS
stocks (``SIP data'') to replace the existing equity data plans. The
three NMS Plans that currently govern SIP data are (1) the
Consolidated Tape Association Plan (``CTA Plan''), (2) the
Consolidated Quotation Plan (``CQ Plan''), and (3) the Joint Self-
Regulatory Organization Plan Governing the Collection,
Consolidation, and Dissemination of Quotation and Transaction
Information For Nasdaq-Listed Securities Traded on Exchanges on an
Unlisted Trading Privileges Basis (``UTP Plan'') (collectively, the
Equity Data Plans''). See Order Directing the Exchanges and the
Financial Industry Regulatory Authority to Submit a New National
Market System Plan Regarding Consolidated Equity Market Data,
Securities Exchange Act Release No. 88827 (May 6, 2020), 85 FR 28702
(May 13, 2020) (File No. 4-757) (``Governance Order''); Amended
Order Directing the Exchanges and the Financial Industry Regulatory
Authority, Inc., to File a National Market System Plan Regarding
Consolidated Equity Market Data, Securities Exchange Act Release No.
98271 (Sept. 1, 2023), 88 FR 61630, 61631 (Sept. 7, 2023) (File No.
4-757).
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B. Notice and Description of Amendment No. 1
Set forth in this Section II.B. is the description of the proposed
Amendment No. 1, along with information required by Rules 601(a) and
608(a) under the Exchange Act,\12\ as prepared and submitted by the
Operating Committee to the Commission.\13\ Set forth in Exhibit A is
the text of the Amendment No. 1 marked to show the proposed changes,
prepared and submitted by the Operating Committee as Addendum 1.
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\12\ See 17 CFR 242.601(a); 242.608(a).
\13\ See Amendment No. 1, supra note 7.
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(a) Rule 608(a)
1. Purpose of the Amendments
Pursuant to Section 14.1(c) of the CT Plan, the Operating Committee
was required to file with the Commission proposed fees charged to
vendors and subscribers for Transaction Reports and Quotation
Information in Eligible Securities.\14\ On December 11, 2025, the
Operating Committee filed a proposal to amend the CT Plan to adopt a
fee schedule for the CT Plan (the ``Original Amendment'') to comply
with the requirements of Section 14.1(c).\15\ The Original Amendment
contained a proposed fee schedule (the ``Proposed Fee Schedule'').
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\14\ All capitalized terms used herein have the same meaning as
is given such terms in the CT Plan.
\15\ See Letter from Jeff Kimsey, Operating Committee Chair, to
Vanessa Countryman, Secretary, Commission, dated December 11, 2025.
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In response to that filing, the Securities and Exchange Commission
(``SEC'' or the ``Commission'') received comment letters from three
firms. Amendment No. 1 to the Original Amendment largely retains the
Proposed Fee Schedule and instead focuses on adding explanation,
rationale, and clarifying guidance in response to comments received by
the Commission. In particular, Amendment No. 1 expands the narrative
discussion of the process used to develop the Proposed Fee Schedule,
and it adds substantially more detail supporting the contention that
consolidated data fees are constrained by competitive alternatives
(including expanded ``synthetic SIP'' benchmarking and related
discussion of why a strict cost-of-service approach is not the
appropriate framework for evaluating these fees). It also adds
clarifying discussion around how key classifications are intended to
operate in practice, most notably, additional explanation of the ``good
faith'' reliance safe harbor for Professional versus Non-Professional
Use representations, clarification of how Direct vs. Indirect Access
applies to extranet connections using a location/latency-based
standard, and a more detailed explanation of the Derived Data approach
(including why the prior single-security construct created line-drawing
disputes and how treating derived-data creation as Non-Display Use is
intended to reduce administrative burden and audit risk).
Amendment No. 1 also supplements and refines the rationale for
specific fee components without materially changing the overall
structure of the Proposed Fee Schedule as filed. For example, it adds
additional explanation regarding the operation and policy objectives of
the Non-Professional tiered ``sliding scale'' (including its
interaction with the Non-Professional Enterprise Cap), expands the
justification for excluding Professionals from the enterprise caps to
address competitive neutrality concerns, and provides additional
support for the inflation-related adjustments to Non-Display, Access,
and Real-Time Redistribution fees (including additional discussion of
technology investment and performance improvements and the choice of a
data-processing-related inflation metric). Finally, it provides
additional explanation for the tape harmonization decisions, both where
charges are aligned across tapes (e.g., Multiple Feed Charges and Late/
Clearly Erroneous Reporting Charges) and where Tape C-only legacy fees
are eliminated (e.g., delayed redistributor, delayed access, and voice
response port charges), emphasizing that these changes are intended
primarily to improve clarity and administrability and reduce
unnecessary tape-by-tape asymmetry.
For ease of readability, the Operating Committee has included a
description of the Proposed Fee Schedule included in the Original
Amendment, with supplemental information to provide additional support
for the proposed fees as well as to respond to comments. This amendment
supplants the Original Amendment in its entirety.
Process for Developing Fee Schedule
As detailed in the Original Amendment, beginning in March 2025, the
Operating Committee formed the Fees and Policies Subcommittee (the
``Subcommittee'') to discuss and develop a fee schedule for the CT Plan
for approval by the full Operating Committee. The Subcommittee
consisted of representatives of the Members and the Advisory Committee.
The Subcommittee generally met on a bi-weekly basis, and as the filing
deadline approached, the Subcommittee began meeting more often, first
weekly, then two times per week, and then daily.
As part of the process, the Subcommittee utilized the services of
an outside consultant to help develop the Proposed Fee Schedule. In
June 2025, the Operating Committee engaged Watchdog Data Services, LLC
(the ``Consultant''). The Consultant was originally engaged to aid in
the Request for Proposal (``RFP'') process to select an independent
Administrator. The Subcommittee determined that the Consultant's
expertise in the market data industry would also be helpful in
developing and modeling a proposed fee schedule.
As stated in the Governance Order,\16\ the Commission directed the
Operating Committee to be responsible for assessing the marketplace for
equity market data products and ensuring that SIP data offerings are
priced in a manner that is fair and reasonable, and designed to ensure
the widespread
[[Page 17028]]
availability of SIP data to investors and market participants.\17\ This
requirement was codified in the CT Plan in Article IV, Section 4.1. The
driving goal of the Subcommittee and the Consultant was to meet this
requirement, by (1) discussing the Proposed Fee Schedule with the
Advisory Committee, (2) conducting extensive outreach with market
participants to make improvements to the fees for equity data products,
and (3) analyzing competing products to develop fees that were fair and
reasonable.\18\
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\16\ Order Directing the Exchanges and the Financial Industry
Regulatory Authority to Submit a New National Market System Plan
Regarding Consolidated Equity Market Data, Securities Exchange Act
Release No. 88827 (May 6, 2020), 85 FR 28702 (May 13, 2020) (File
No. 4-757) (``Governance Order'').
\17\ See id. at 28730.
\18\ The Operating Committee does not believe that a cost-based
ratemaking is an appropriate methodology. An Advisory Committee
appointed by the Commission in 2001 to review market data issues
concluded that ``the `public utility' cost-based ratemaking approach
is resource-intensive, involves arbitrary judgments on appropriate
costs, and creates distortive economic incentives.'' Report of the
Advisory Committee on Market Information: A Blueprint for
Responsible Change, at Sec. VII.D.3 (SEC Sept. 14, 2001); see also
Stephen G. Breyer, Analyzing Regulatory Failure: Mismatches, Less
Restrictive Alternatives, and Reforms, 92 Harv. L. Rev. 547, 565
(1979) (``[I]nsofar as one advocates price regulation . . . as a
`cure' for market failure, one must believe the market is working
very badly before advocating regulation as a cure. Given the
inability of regulation to reproduce the competitive market's price
signals, only severe market failure would make the regulatory game
worth the candle.''). In response, and consistent with the purposes
of the Exchange Act, the Commission has increasingly permitted
competitive forces to determine the prices of market data fees.
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While developing the Proposed Fee Schedule, the Subcommittee
instructed the Consultant to conduct two surveys of market data
subscribers. The first survey asked respondents about their usage of
proprietary data feeds as an alternative to the SIP and focused on the
administrative burdens currently experienced by consolidated tape
subscribers that they believed need to be addressed. The second survey
consisted of a deeper dive into the topics discussed in the first
survey as well as obtaining feedback on potential pricing options the
Subcommittee was considering.
As a result of the surveys, the Subcommittee developed an
understanding that many market participants were shifting their data
usage away from the SIP to competing proprietary market data products,
or using delayed data to avoid real-time market data fees completely.
While this movement has occurred with respect to various types of
usages, it was most prevalent with respect to displayed usage, i.e.,
Professional and Non-Professional display usage. Consequently, the
Subcommittee developed a Proposed Fee Schedule with the aim of lowering
or maintaining the fees for displayed usage in order to prevent further
attrition from SIP data to competing proprietary products.
Additionally, the Subcommittee was concerned that audit-related
burdens and risk might affect the widespread availability of SIP data
where, again, market participants shifted their real-time market data
usage to proprietary market data products offering simplified fee
schedules that reduced such issues. Nearly all survey respondents
stated that the CQ/CTA/UTP Plan fee schedules (the ``Existing Fee
Schedules'') imposed on them an excessive administrative burden and,
accordingly, requested the Subcommittee focus on:
1. Reducing administrative burden associated with Professional
versus Non-Professional definitions;
2. Removing outdated terminology (e.g., unit of count); and
3. Clarifying definitions to reduce audit risk.
As an example, 25 of 27 respondents in the second survey classified
their challenges with SIP data primarily as administration-related
rather than fee-related. Concerns regarding audits were the most
reported issue. The second survey also showed that market data
subscribers have replaced or are considering replacement of SIP usage
with proprietary feeds that offer enterprise licenses, particularly
because the enterprise license results in virtually no audit risk. As a
result of the survey and Advisory Committee feedback, the Operating
Committee focused on revisions that (1) add clarity to the application
of the fee schedule, and (2) address those issues that the Operating
Committee believes create the most audit risk.
Following extensive discussions, the Subcommittee developed the
Proposed Fee Schedule and referred it to the Operating Committee for
approval. The Proposed Fee Schedule was approved by a supermajority of
the Members.
Proposed Fee Schedule
Based on the Consultant's surveys, the Operating Committee
understands that market usage of the consolidated data feed has
decreased in favor of top-of-book proprietary data feeds and/or delayed
data. The Operating Committee developed the Proposed Fee Schedule with
the aim of recapturing this market and addressing the concerns of those
market data subscribers who have shifted their usage away from the
consolidated data feed. As one consideration in developing a proposed
fee schedule, the Subcommittee analyzed the Existing Fee Schedules
under the CQ/CTA Plans and the UTP Plan. The various components of the
Existing Fee Schedules were discussed, with the Subcommittee
determining which components to carry over into the Proposed Fee
Schedule, as well as developing improvements to reduce administrative
burden.
Generally, the Proposed Fee Schedule modifies the Existing Fee
Schedules in two ways: (1) modifications to reduce administrative
burden; and (2) modifications to the actual fees charged. These changes
are described below.
Changes To Reduce Administrative Burden
As part of the Subcommittee's work, the Operating Committee
developed solutions to issues identified in the surveys and issues
that, based on prior experience, have led to audit-related risks among
market data subscribers. Members of the Advisory Committee, in
particular, provided invaluable suggestions in this regard. These
solutions are incorporated into the Proposed Fee Schedule and
summarized below.
Professional Versus Non-Professional Usage
The Operating Committee proposes to modify the approach to labeling
users as Professional or Non-Professional, focusing on the usage of the
data, rather than the status of the individual. Currently, a Non-
Professional is defined as a natural person who is neither:
(1) registered or qualified in any capacity with the Commission,
the Commodities Futures Trading Commission, any state securities
agency, any securities exchange or association or any commodities or
futures contract market or association;
(2) engaged as an ``investment adviser'' as that term is defined in
Section 202(a)(11) of the Investment Advisers Act of 1940 (whether or
not registered or qualified under that Act); nor
(3) employed by a bank or other organization exempt from
registration under federal or state securities laws to perform
functions that would require registration or qualification if such
functions were performed for an organization not so exempt.
If a person is not a Non-Professional, then that person is
considered a Professional.
As part of the Consultant's first survey, almost all respondents
stated that the Professional versus Non-Professional definition creates
significant administrative burdens that are time-consuming and expose
market data subscribers to substantial audit risk, particularly for
individuals
[[Page 17029]]
registered with regulators who open personal trading accounts.
As a result, in the Proposed Fee Schedule, the Operating Committee
proposes simplified, use-based definitions. Professional use would be
defined as:
(i) any use of market data by or on behalf of any entity (for
example, a corporation, company, partnership, limited partnership,
limited liability company, or association), except trusts not for
compensation; or
(ii) use of market data by an individual to provide a service to a
third party for compensation.
Usage will be considered Non-Professional if it does not fall
within the above categories. The Operating Committee believes these
proposed definitions eliminate the burden on data subscribers of
determining whether an individual trading for their own account is a
Professional due to regulatory registration.
Further, the Operating Committee is including a safe harbor to
further reduce administrative burden and audit risk where any real-time
redistributor that relies in ``good faith'' on a representation by the
user regarding the user's Professional usage versus Non-Professional
usage of the data shall be exempt from audit liability based on such
representations. Currently, a real-time redistributor could have audit
liability where a market data user it distributes to claims they are
not a Professional but where publicly-available resources (such as
FINRA's BrokerCheck database) demonstrate that the individual is in
fact a Professional. Because there is no such publicly-available source
that would demonstrate that a user is or is not engaged in Professional
use, the Operating Committee believes it is appropriate to offer a safe
harbor where the real-time redistributor has obtained the necessary
representations from its user base regarding their data usage, or
otherwise engaging in misrepresentations or other fraudulent practices.
The Operating Committee has included a requirement that the real-time
redistributor's reliance be in ``good faith'', in order to
disincentivize redistributors from instructing their user base to
provide false representations.\19\ The Operating Committee believes
that the safe harbor will lessen compliance and audit burdens. It will
allow real-time redistributors to rely on representations without
having to worry about those representations later proving to be untrue;
currently, it is possible that during an audit, an individual lists
themselves as a Non-Professional but they are found to work in the
financial industry. As a result, during audits, the Operating
Committee's expectation is that such redistributors will be able to
provide their process for obtaining the necessary representation by a
user as opposed to having to discuss individual users' Professional/
Non-Professional status.
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\19\ One commenter raised concerns regarding what is considered
``good faith'' and what such a standard requires operationally. See
Massive Letter at 8. The Operating Committee does not believe that
the ``good faith'' standard requires any specific operational
standard. Instead, the ``good faith'' requirement is simply designed
to prevent redistributors from notifying their user base to provide
representations in a misleading manner. As long as the redistributor
obtains the representations in an unbiased manner, the Operating
Committee believes that such approach will be in ``good faith''.
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The administrative simplifications reflected in the Proposed Fee
Schedule are consistent with the Exchange Act because they are designed
to remove impediments to, and perfect the mechanisms of, a national
market system by reducing unnecessary compliance and administrative
friction that can discourage broad and efficient access to consolidated
equity market data. In particular, by moving to use-based Professional/
Non-Professional definitions, providing a safe harbor for ``good
faith'' reliance on user representations, and otherwise simplifying
classifications and reporting/compliance exposure, the proposals
discussed above support fair and orderly markets and the protection of
investors through wider practical availability of the consolidated tape
on terms that are easier to administer and less prone to interpretive
disputes.
Direct Versus Indirect Access
The Operating Committee proposes simplifying the definitions of
Direct and Indirect Access. Currently, the definitions do not align
between the CQ/CTA and UTP Plans. For instance, Direct Access is
defined in the CQ/CTA Plans as:
[A] direct computer-to-computer linkage with the computer
facilities that the Participants make available at the site of the
CTA/CQ Plans' Processor, Securities Industry Automation Corporation
(``SIAC'') in New York City. Access to data feeds through an
extranet service subjects the data feed recipient to direct access
charges.
On the other hand, Direct Access is defined in the UTP Plan as:
[A] connection that receives access to any one or more UTP Real-
Time Uncontrolled Products by means of a linkage or interface
directly with the Plan's Securities Information Processor (SIP) via
an extranet or other connection that the SIP has approved. Direct
access includes indirect access. Examples: Extranet Connections;
Nasdaq Direct (direct circuit connection or point of presence);
Nasdaq Co-location that do not further redistribute to downstream
connections; and Connections located within any co-location
facility.
With respect to Indirect Access, the CQ/CTA Plans define it as:
[A] computer-to-computer linkage with facilities provided by
Vendors, rather than by SIAC. For example, parties that receive
market data via a Vendor data feed service, and who gain control
over the subsequent use and redistribution of the data, are
generally viewed as having indirect access.
Indirect Access is defined in the UTP Plan as:
Indirect Access means any other connection to a UTP Real-Time
Uncontrolled Product, including Vendors with a Nasdaq Co-location
connection that further redistribute to downstream connections
outside any Nasdaq Colocation facility.
The Operating Committee proposes simplifying the definition of
Direct Access by defining it as ``any connection within any data center
in which a Processor is located.'' The Indirect Access definition will
also be simplified to be ``any connection that is not Direct Access.''
The Operating Committee believes that these proposed definitions
simplify the fee schedule by providing clarity as to when access is
considered direct, ensures that the higher fees associated with direct
access are correlated to reduced latency, and also prevents gaming. The
Operating Committee believes that it is appropriate to differentiate
between connections within a data center in which a Processor is
located versus connections outside of such data centers, as connections
outside such data centers most likely have increased latency and
therefore should be subject to lower fees.
Further, the Operating Committee believes that the proposed
definition helps to prevent gaming as it prevents firms from inserting
extranet service providers between the firms and the processors solely
to take advantage of the lower indirect access fees while still
obtaining the advantage of reduced latency. One commenter raised
questions regarding whether extranet connections constitute Indirect
Access under the proposed definitions.\20\ The application of whether a
connection is Direct Access or Indirect Access does not turn on whether
it is an extranet connection, but instead turns on where such
connection takes place. In alignment with the latency-based rationale,
if the connection to an
[[Page 17030]]
extranet occurs outside a data center in which a Processor is located,
then such connection would have increased latency and should pay the
lower fee. If the extranet connection occurs inside a data center in
which a Processor is located, then adding in that connection should not
allow a firm to avoid paying the Direct Access fee while still
maintaining latency benefits from connecting inside the same data
center as the Processor.
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\20\ See Massive Letter at 2.
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The Proposed Fee Schedule's latency-based focus in defining Direct
versus Indirect Access is consistent with the Exchange Act approval
standard because it is designed to promote fair and orderly markets and
perfect the mechanisms of a national market system by basing access
fees on how the data is used as opposed to technical delivery
differences that may not have functional differences. Specifically, by
defining ``Direct Access'' as connections within a data center in which
a Processor is located (and ``Indirect Access'' as all other
connections), the Proposed Fee Schedule draws a clear, administrable
line that tracks a key economic attribute, i.e., lower latency, that is
particularly valuable for latency-sensitive workflows, while
recognizing that connections outside the Processor's data center most
likely have increased latency and therefore should be subject to lower
fees. This approach supports the public interest and investor
protection by facilitating predictable, transparent access terms that
reduce disputes and opportunities for ``gaming'' (e.g., inserting
intermediaries solely to obtain lower-fee treatment while retaining
data center latency advantages), thereby improving the integrity and
efficiency of consolidated data access within the national market
system.
Derived Data
Under the Existing Fee Schedules, Derived Data is generally not
fee-liable, except single-security Derived Data may be fee-liable at
the underlying rate for Tape C. Tape A and Tape B do not contain a
corresponding single-security Derived Data fee liability. The Existing
Fee Schedules also do not currently charge Non-Display Use for the
creation of Derived Data.
To replace the current construct, the Operating Committee proposes
to include in the definition of Non-Display Use that Non-Display Use
will include the creation of Derived Data. As a result, the creation of
Derived Data will now be fee liable. Based on a review of other market
data providers, the Operating Committee has found that the industry
approach is to have a separate Non-Display Use category solely related
to the creation of Derived Data. Rather than taking that approach here,
the Operating Committee instead proposes to incorporate the creation of
Derived Data within existing Non-Display Use categories (internal usage
or on behalf of customers). Many firms' overall fee liability would not
be affected by specifying that the creation of Derived Data is Non-
Display Use, because for the large majority of broker-dealers, vendors,
and other market participants that engage in any non-display activity,
the Non-Display fee is assessed as a flat, monthly entitlement (i.e., a
one-time monthly fee per tape/category as applicable), and those firms
already pay Non-Display fees today for other non-display workflows
(such as internal analytics, automated processing, routing support,
surveillance, risk, and similar machine-processing uses). As a result,
clarifying that derived-data creation falls within Non-Display Use
generally does not add an incremental charge for firms that are already
non-display subscribers; instead, it primarily clarifies treatment and
reduces disputes about whether particular processing steps are
``display'' versus ``non-display'' when generating transformed outputs.
The principal firms that could experience a changed fee outcome are
those that previously were not paying Non-Display fees but nonetheless
create derived products from consolidated data, e.g., certain index
providers/index creators, analytics publishers, or other firms whose
primary activity is producing derived values.
Treating the creation of Derived Data as Non-Display Use is
consistent with (and in practical operation closely parallels) other
established Non-Display use cases because the relevant fee
classification should turn on the act of accessing and processing
consolidated data for analytical/functional purposes, not on the
specific output from such use. As described in the Proposed Fee
Schedule's definition of Non-Display Use, non-display already
encompasses ``accessing, processing, or consuming'' data for purposes
other than solely facilitating delivery to a display, and the creation
of Derived Data fits naturally within that same category: it involves
manipulating and transforming the consolidated data, often through
aggregation, calculation, normalization, or model inputs, in a manner
that is operationally indistinguishable from other non-display
workflows (e.g., automated processing, analytics, alerting, routing
support, risk calculations).
The Operating Committee believes this approach is fair and
reasonable because fee liability should turn on the use made of the CT
Plan data, i.e., the act of accessing, processing, or consuming
consolidated data, rather than on the form of the downstream output.
That use-based approach is consistent with the structure of the
Proposed Fee Schedule's Non-Display definition, which already turns on
whether a recipient is ``accessing, processing, or consuming'' data for
purposes other than merely facilitating delivery for display or
redistribution. The creation of Derived Data fits naturally within that
framework because it necessarily involves transforming the underlying
consolidated data through calculation, aggregation, normalization,
weighting, modeling, or similar machine-processing steps. In
operational terms, that activity is not meaningfully different from
other well-established Non-Display uses, such as analytics, risk
processing, alerting, routing support, or surveillance. Classifying
Derived Data creation as Non-Display Use therefore treats like
processing activity alike, and is a fair and reasonable fee structure.
This approach also avoids the conceptual flaw in the prior derived-
data policy that, in effect, made fee liability depend on the nature of
the output (e.g., whether derived data was displayed, and how), rather
than on the underlying use of the CT Plan data to generate derived
information in the first place. Non-Display Use is intended to classify
the use of market data, accessing and processing it for functional
value beyond simply putting the raw feed on a display, and it does not
(and should not) change based on whether the downstream product is
later visualized, distributed, or embedded in another workflow. By
treating derived-data creation as Non-Display, the Proposed Fee
Schedule adopts an intuitive, administrable rule: when a recipient uses
consolidated data to create a transformed informational product, that
activity is properly categorized as Non-Display regardless of the
eventual presentation format.
Consequently, the Operating Committee believes that applying Non-
Display treatment to derived-data creation is consistent with the
Exchange Act because it (i) aligns fee liability with a distinct,
value-bearing use of consolidated data (transforming it into a new
informational product), (ii) promotes an administrable, predictable
framework that reduces line-drawing and compliance disputes, (iii)
ensures fair treatment among market data users by aligning fee
structures based on use, and thus (iv) is necessary or appropriate in
the public interest, for the protection
[[Page 17031]]
of investors and the maintenance of fair and orderly markets, and to
remove impediments to, and perfect the mechanisms of, a national market
system.
Additionally, the proposed approach is intended to reduce
administrative burden and improve clarity: it eliminates downstream fee
liability tied to the display of solely ``single-security derived
data''. Tapes A and B do not currently have a derived data fee, and
Tape C has fee liability solely for single-security derived data. This
distinction created line-drawing issues that resulted in administrative
burden and uncertainty. By eliminating single-security derived data fee
liability, the new Administrator and market data users will not be
required to determine fee liability based on highly fact-specific and
evolving technical implementation choices. For those users that were
previously receiving single-security derived data, such users will
therefore experience a decrease in their fees since single-security
derived data is no longer fee liable.
Therefore, the Operating Committee believes that removing
downstream fee liability associated with the display of single-security
derived data is consistent with the Exchange Act because it is designed
to remove impediments to, and perfect the mechanisms of, a national
market system by replacing an administratively difficult line-drawing
regime with a clearer, more enforceable framework. Eliminating that
category reduces unnecessary administrative friction while improving
predictability and compliance, which supports the public interest,
investor protection, and fair and orderly markets by facilitating
broader, more reliable use and redistribution of consolidated market
data on administrable terms.
Simplified Definitions and Non-Billable Services
In reviewing the Existing Fee Schedules and combining the fee
schedules into a single fee proposal under the CT Plan, the Operating
Committee has adopted definitions and approaches to Non-Billable
Services that are substantively similar to the same definitions and
non-billable services under the Existing Fee Schedules, with
alterations to make them easier to understand and implement. In many
instances, this involved choosing a definition or approach that
currently exists under the CQ/CTA Plans or UTP Plan, and potentially
further refining it or adding clarity to reduce confusion regarding the
Proposed Fee Schedule's applicability. In general, in selecting between
competing definitions in the Existing Fee Schedules, the Operating
Committee selected the definition deemed to offer greater ease of
administration. The relevant definitions and selected approach are
described below.
Non-Display Use. The Operating Committee proposes to define Non-
Display Use as ``accessing, processing or consuming data, whether
received via Direct and/or Redistributor Data Feeds, for a purpose
other than solely facilitating the delivery of the data to the Data
Feed Recipient's display or for the purpose of further internally or
externally redistributing the data.'' This definition proposed herein
matches the UTP Plan's definition, but with the addition of Derived
Data creation as discussed above. While there were no substantive
differences between the CQ/CTA Plans' and the UTP Plan's definitions,
selecting a single, harmonized set of definitions where the legacy CQ/
CTA and UTP Plans previously differed is consistent with the Exchange
Act because it directly advances the statutory objective to ``remove
impediments to, and perfect the mechanisms of, a national market
system'' by reducing avoidable administrative complexity and
interpretive risk for subscribers, redistributors, and the
Administrator.
Derived Data. The Operating Committee proposes to define Derived
Data as ``pricing data or other information that is created in whole or
in part from the CT Plan Information'' and ``[t]o be considered Derived
Data: (1) the Derived Data cannot be reverse engineered to recreate the
Information, and (2) the Derived Data cannot be used to create other
data that is recognized to be a reasonable facsimile for the
Information.'' This definition matches the UTP Plan's definition. While
there were no substantive differences between the CQ/CTA Plans' and the
UTP Plan's definitions, selecting a single, harmonized set of
definitions where the legacy CQ/CTA and UTP Plans previously differed
is consistent with the Exchange Act because it directly advances the
statutory objective to ``remove impediments to, and perfect the
mechanisms of, a national market system'' by reducing avoidable
administrative complexity and interpretive risk for subscribers,
redistributors, and the Administrator.
Broadcast/Cable Television. The Operating Committee proposes to
revise the Broadcast definition to consist of any broad-based
dissemination of information to the general public through cable,
satellite, internet, or traditional means, excluding transmission of a
data feed or transmission via Application Programming Interface
(``API''). The Operating Committee believes this definition accounts
for broader methods of distribution, including through ``cable,
satellite, internet, or traditional means.'' The Operating Committee
believes that this update to the Broadcast definition is necessary
given the changes in technology since the current definition in the
Existing Fee Schedules was adopted. The updated definition ensures that
similar methods of transmission are treated similarly under the
Proposed Fee Schedule. In addition to updating the definition, the
Operating Committee also proposes to simplify the Proposed Fee Schedule
by adopting the same rate schedule across all three Tapes for Broadcast
Fees. Currently, each Tape has a different rate for such usage, with
the Tape C rate falling between the Tape A and Tape B rates. To
simplify the fee schedule and maintain similar usage levels, the
Operating Committee proposes to adopt the Tape C rate for Tape A and
Tape B as well.
The Proposed Fee Schedule's expansion of the Broadcast/Cable
Television category is consistent with the Exchange Act because it
updates the fee schedule to reflect changed market realities in how
``broadcast content'' is delivered and consumed, and thereby removes
impediments to, and perfects the mechanisms of, a national market
system by applying a coherent, technology-neutral treatment to
functionally equivalent mass-distribution uses. In particular,
``broadcast'' dissemination of market data is no longer limited to
traditional over-the-air television; it now commonly occurs through
cable and satellite channels and streaming/internet-based distribution
that reaches comparable broad audiences and presents substantially
similar compliance and monitoring challenges. Harmonizing treatment
across these delivery methods promotes administrability and consistency
without turning on legacy transmission technology, supporting the
public interest, investor protection, and fair and orderly markets by
enabling broad public access to market data through modern distribution
channels on clear terms.
Service Facilitator. The Operating Committee proposes to define
Service Facilitator as ``a third party to which a user outsources the
responsibility for managing some portion of its technical, financial,
legal, or operational role in distributing the Information.'' This
definition is largely based on the UTP
[[Page 17032]]
Plan's definition. The proposed definition, however, contains a
reference to the operational/administrative use exemption because the
Operating Committee believes that the exception for Service
Facilitators should be similar to that exemption. The operational/
administrative use exemption should be applicable regardless of whether
such use is internal or outsourced to a third party; referencing the
exemption in the Service Facilitator definition ensures such an
outcome.
The Proposed Fee Schedule's treatment of Service Facilitators,
including its express reference to an operational/administrative use
exemption, is consistent with the Exchange Act approval standard
because it promotes a consistent, technology-neutral application of the
fee schedule and thereby helps ``remove impediments to, and perfect the
mechanisms of, a national market system.'' Specifically, when
consolidated market data is accessed and used solely for operational or
administrative purposes (e.g., billing, entitlement management,
recordkeeping, internal systems administration), those activities are
substantively similar whether performed internally by a subscriber/
redistributor or externally by a third-party service provider acting on
that firm's behalf. Treating the same operational/administrative
function differently depending only on whether it is performed in-house
or outsourced would introduce artificial distinctions and compliance
friction, potentially discouraging efficient outsourcing and creating
inconsistent outcomes for economically equivalent uses. By recognizing
the operational/administrative exemption in the Service Facilitator
context, the Proposed Fee Schedule treats like activity alike, reduces
avoidable administrative complexity, and supports fair and orderly
markets through clearer, more administrable rules.
Quote/Query. The Operating Committee proposes to define a ``Quote''
packet as ``any data element or all data elements in respect of a
single issue'' and ``[l]ast, open, high, low, volume, net change, bid,
offer, size, and best bid and offer with size are examples of data
elements.'' This definition matches the definition in the CQ/CTA Plans.
The Operating Committee believes that adopting the CTA/CQ Plans'
definition of ``Quote'' (i.e., defining the unit as a ``quote packet''
that includes any data element or all data elements in respect of a
single issue) is consistent with the Exchange Act because it provides a
clear, content-based, technology-neutral billing unit that is easier to
administer than the UTP Plan's ``Query'' construct, which contains a
definition focused on the act of requesting quotation information as
opposed to defining what a ``Quote'' is. Using the CTA/CQ ``Quote''
definition therefore promotes more consistent and non-discriminatory
treatment of similarly situated users by tying fee liability to an
objective unit of information rather than the mechanics of how a
recipient's system happens to retrieve it, and it reduces compliance
friction and audit risk in a manner that helps ``remove impediments to,
and perfect the mechanisms of, a national market system,'' while
supporting a fee framework that is ``fair and reasonable'' and ``not
unreasonably discriminatory'' under Section 11A.
The Proposed Fee Schedule also maintains the per-Quote cap as a
monthly ceiling on a Data Recipient's aggregate fees attributable to
Quote activity for the applicable tape(s): the Data Recipient continues
to count and report its quote volume for the month, and fees accrue
under the per-quote rate only until total Quote charges reach the
applicable cap, after which additional Quote volume in that month is
not charged (or is effectively reversed through a credit/true-up
mechanism). The Operating Committee believes this cap is consistent
with the Exchange Act because it provides an objective, non-
discriminatory mechanism that allows market participants to obtain the
lowest price available under the Fee Schedule for their particular
usage profile, i.e., recipients with lower quote volumes pay under the
per-Quote methodology, while recipients whose quote volumes would
otherwise produce charges exceeding the cap are not forced to pay more
than the effective flat-fee amount reflected in the cap. By limiting
fees to a predictable maximum and preventing quote-driven charges from
exceeding the cap solely due to volume, the cap promotes the
``widespread availability'' of consolidated data and supports fees that
are ``fair and reasonable'' and ``not unreasonably discriminatory''
under Section 11A.
Finally, the per-Quote fee is not changing from the Existing Fee
Schedules. The Operating Committee believes that maintaining the per-
Quote rate at $0.0075 per Quote is consistent with the Exchange Act
because it preserves stable, predictable pricing for a core unit of CT
Plan information while the Plan simultaneously modernizes definitions
and billing constructs. Keeping the rate unchanged (i) promotes the
``widespread availability'' of consolidated market data by maintaining
existing pricing, (ii) supports a fee framework that is ``fair and
reasonable'' and ``not unreasonably discriminatory'' by applying a
uniform, objective per-Quote rate to all similarly situated recipients,
with any differences in total charges driven by measured Quote
activity, and (iii) provides continuity with established industry
practice.
The relevant non-billable services and selected approach are
described below:
Consolidated Volume Only. The Operating Committee proposes a
simpler approach to Consolidated Volume Only. Replacing longer
definitions in the Existing Fee Schedules, the Proposed Fee Schedule
would simply provide that ``real-time trading volume occurring on all
Members'' is considered ``Consolidated Volume,'' which may be displayed
with no additional fees. The Operating Committee believes that the
Proposed Fee Schedule's simplified ``Consolidated Volume Only''
provision is consistent with the Exchange Act because it promotes the
widespread availability of consolidated market data by enabling
investor-facing platforms to provide an important transparency metric
without incremental cost or complex entitlement logic, thereby helping
to ``remove impediments to, and perfect the mechanisms of, a national
market system.''
Academic Waivers. The Operating Committee proposes to adopt an
Academic Waiver policy that largely matches the CQ/CTA Plans' policy,
stating that the waiver covers ``[d]ata used for academic research,
teaching, or other educational purposes.'' The exemption makes clear
that it excludes use of market data for securities trading or for any
commercial purpose. The Operating Committee does not believe that the
updated exemption would result in a change to its application, but
instead would simply make the exemption easier to understand as to the
circumstances which Academic Waiver can be utilized. As a result, the
Operating Committee believes that the Academic Waiver policy is
consistent with the Exchange Act as it promotes predictable, non-
discriminatory application, which in turn helps ``remove impediments
to, and perfect the mechanisms of, a national market system.''
System Migration. The Operating Committee proposes to adopt a
System Migration exemption that largely matches the UTP Plan's
exemption, providing that the exemption covers ``[u]sers in the process
of migrating from one system to another. The proposed exemption,
however, contains a
[[Page 17033]]
requirement that the migration must take place over a reasonable period
of time. The Operating Committee believes that the addition of this
language is necessary to prevent abuse of the System Migration
exemption where a firm may utilize two systems simultaneously for
extended periods of time, potentially unrelated to a system migration,
but claim the System Migration exemption to avoid fee liability.
The Operating Committee believes that adopting a System Migration
exemption that largely matches the UTP Plan's approach, with the added
requirement that the migration occur over a reasonable period of time,
is consistent with the Exchange Act because it accommodates legitimate,
time-limited duplicative entitlements needed to execute operational
transitions without disruption, while preventing the exemption from
being used as an open-ended mechanism to avoid fee liability for
ongoing parallel production environments. This ``reasonable period''
limitation promotes an equitable allocation of fees by ensuring
similarly situated recipients are treated similarly (i.e., the
exemption is available for genuine migrations, not indefinite dual-
system usage), and it improves administrability and auditability.
Disaster Recovery. The Disaster Recovery exemption in the Proposed
Fee Schedule matches the Existing Fee Schedules, permitting users to
``activate back-up systems, networks, or facilities to be used solely
in the event of a primary system outage or natural disaster'' without
additional fee liability. The Operating Committee believes that
retaining the Disaster Recovery exemption as reflected in the Existing
Fee Schedules is consistent with the Exchange Act because it supports
market resiliency and continuity, core components of fair and orderly
markets, by permitting firms to activate back-up systems during outages
or disasters without incurring duplicative fees for the same functional
usage.
Administrative/Operational Use. The Operating Committee proposes to
adopt an Administrative/Operational Use exemption that largely matches
the UTP Plan exemption, covering ``[d]ata usage for operational or
administrative functions that support the delivery of market data to
users.'' The Operating Committee, however, has adopted revisions to the
language as to when the exemption is not applicable, specifically when
using real-time market data for securities transactions or to support
customers in the trading of securities. The Operating Committee
believes that the revisions will make it easier to understand when the
Administrative/Operational Use applies. The Operating Committee has
removed the Administrative Usage Credit that was in the CTA Plan, which
applied a credit of the greater of 10 Display Devices or 5 percent of
the total number of professional devices reported on a monthly basis.
The Operating Committee proposes that instead of providing a credit, a
market data subscriber would simply not be fee liable for its
Administrative/Operational Use that is not based on its reported usage.
The Operating Committee believes the revised Administrative/
Operational Use exemption is consistent with the Exchange Act because
it clarifies that non-trading, back-office, technical, testing, and
other operational uses that support delivery of market data to users
may be treated as non-fee-liable, while making equally clear that the
exemption does not apply where real-time market data is used to execute
securities transactions or to support customers' trading. This
clarification promotes fair and non-discriminatory application by
drawing a practical, use-based line that reduces interpretive disputes
and audit risk, and it removes impediments to efficient dissemination
by ensuring firms are not charged for incidental operational functions
unrelated to trading value. In addition, replacing the CTA Plan's
``Administrative Usage Credit'' with a straightforward non-fee-liable
treatment for qualifying administrative/operational use improves
administrability and equitable allocation by tying fee liability to
actual usage categories rather than a credit construct that can create
avoidable complexity.
Finally, selecting a single, harmonized set of definitions where
the legacy CQ/CTA and UTP Plans previously differed is consistent with
the Exchange Act because it directly advances the statutory objective
to ``remove impediments to, and perfect the mechanisms of, a national
market system'' by reducing avoidable administrative complexity and
interpretive risk for subscribers, redistributors, and the
Administrator. A unified CT Plan necessarily benefits from a single
baseline taxonomy: where identical economic activity could be treated
differently solely due to tape-specific definitional variance, firms
historically were required to maintain parallel compliance logic,
reporting, and audit support, creating friction that is unrelated to
investor protection or market integrity. Harmonization addresses that
friction, promotes more consistent application, and supports a more
efficient consolidated market data framework.
Setting of Fee Levels
In setting fees for the Proposed Fee Schedule, the Operating
Committee focused on two objectives: (1) incentivizing the continued
and potentially expanded dissemination of the consolidated feed; and
(2) making inflation-related adjustments for certain components of the
Existing Fee Schedules that have remained stagnant for ten years or
more. These objectives led to a Proposed Fee Schedule that (1) leaves
display-related fees largely unchanged or potentially reduced to
incentivize display to both Professional and Non-Professional use; and
(2) adjusts certain discrete fees for inflation based on a widely-
accepted metric.
These changes are discussed below.
Professional Fees
As part of the Proposed Fee Schedule, the Operating Committee
proposes a Professional fee for Tape A that collapses the four existing
Tape A tiers into a single flat fee, which aligns with the fee
structure applied to Tapes B and C. Under the Existing Fee Schedules,
Tape A employs tiered per-device pricing ($45 for one to two devices;
$27 for three to 999 devices; $23 for 1,000 to 9,999 devices; and $19
for 10,000 or more devices), while Tape B and Tape C each apply a flat
per-device rate of $23 and $24, respectively. The proposal simplifies
the Tape A fee structure by establishing a flat per-device professional
rate of $26 for Tape A, while maintaining the existing $23 rate for
Tape B and $24 rate for Tape C. The Operating Committee calculated the
$26 per Professional fee for Tape A by reviewing the current
distribution of fee tiers across market data subscribers and selecting
a fee that resulted in fee neutrality across the entire universe of
subscribers. Of the firms currently paying for Tape A, 99.9 percent of
firms currently pay either $45 or $27 for their device fee, and
therefore, almost all firms will see a decrease in their Tape A
Professional fee as a result of this change. While larger users may
experience a slight increase in their fees, the Operating Committee
believes that the new fee is reasonable as it is in line with the fees
charged for Tape B and Tape C. Additionally, the Operating Committee
believes that the changes made to reduce administrative burden will
help to offset the potential increase in fees that larger users may
experience; those larger users will most likely be the biggest
beneficiaries of the changes
[[Page 17034]]
designed to reduce administrative burden.
Commenters had issue with the Operating Committee's use of top-of-
book (``TOB'') proprietary data feeds to assess the reasonableness of
the fees in the Proposed Fee Schedule. The Operating Committee agrees
that proprietary TOB products and the consolidated feed are not
identical in all respects, and the Proposal does not rely on TOB
pricing as the only support for fee reasonableness. But TOB pricing
remains a relevant competitive reference point because it reflects what
sophisticated market data consumers actually can pay to assemble a
consolidated view from proprietary sources (a ``synthetic SIP''), and,
importantly, it highlights that the CT Plan product is priced at or
below the economic alternative of a synthetic SIP created from
proprietary products.
The largest exchange families offer consolidated TOB products
priced at $18.00, $10.00, and $28.50 per Professional user, and other
exchanges add per-user and/or per-data-recipient charges (including
examples of $2.00 per Professional user, $0.10 per Professional user,
$0.01 per Professional user, and $500 per Data Recipient for two
exchanges), which together yield a ``synthetic'' TOB input cost of
$58.61 per Professional user plus $1,000 per Data Recipient, all before
a subscriber incurs the additional costs associated with its
integration, normalization, entitlement, monitoring, and operations
required to consolidate and maintain a comparable view across disparate
proprietary sources.\21\ Against that backdrop, the Proposed Fee
Schedule's $73 combined Professional fee for Tapes A, B, and C
represents a competitively reasonable all-in alternative that also
allows subscribers to avoid the cost and operational burden of building
and maintaining their own synthetic consolidation product. Looking at
just Professional usage, if a Data Recipient has fewer than 70 users,
the Proposed Fee Schedule provides a cheaper alternative than the
proprietary TOB products being used to create a synthetic SIP. Because
Tape A previously tiered charges based on number of devices, the
billing distribution for Tape A can be illustrative in determining what
percentage of firms would fall within this bucket. Based on an analysis
of the prior Tape A professional tier breakdown, 84 percent of firms
had only one or two Professional devices reported. Given the fact that
an overwhelming majority of market data recipients had fewer than 70
Professional Users, the Operating Committee believes that the Proposed
Fee Schedule is fair and reasonable. Therefore, in response to
commenters, the Proposed Fee Schedule is not ``anchoring to the upper
end'' of TOB pricing, but instead offering a consolidated product that
compares favorably to the aggregate costs a subscriber would incur to
replicate similar functionality through proprietary inputs.
---------------------------------------------------------------------------
\21\ The relevant fee schedules for the consolidated TOB
products can be found at the following locations: (1) for NYSE Best
Quotes and Trades, <a href="https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Pricing.pdf">https://www.nyse.com/publicdocs/nyse/data/NYSE_Market_Data_Pricing.pdf</a>; (2) for Nasdaq Basic, <a href="https://data.nasdaq.com/price-list#NasdaqBasic">https://data.nasdaq.com/price-list#NasdaqBasic</a>; (3) for Cboe One Feed,
<a href="https://www.cboe.com/market_data_services/us/equities/cboe_one/">https://www.cboe.com/market_data_services/us/equities/cboe_one/</a>; (4)
for IEX TOPS Feed, <a href="https://www.iex.io/resources/trading/fee-schedule#market-data-fees">https://www.iex.io/resources/trading/fee-schedule#market-data-fees</a>; (5) for MEMX MEMOIR Top and Last Sale
Feeds, <a href="https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/">https://info.memxtrading.com/equities-trading-resources/us-equities-fee-schedule/</a>; (6) for LTSE Top of Book Feed, <a href="https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/6927783009a1256edf61c295_LTSE%20Fee%20Schedule_December%201%2C%202025.pdf">https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/6927783009a1256edf61c295_LTSE%20Fee%20Schedule_December%201%2C%202025.pdf</a>; (7) for MIAX Pearl Equities Top of Market Feed,
MIAX_Pearl_Equities_Fee_Schedule_02012026_2.pdf; and (8) 24X Top
Feed, <a href="https://equities.24exchange.com/api/media/file/SR-24X-2025-09-Market-Data-Fees-website.pdf">https://equities.24exchange.com/api/media/file/SR-24X-2025-09-Market-Data-Fees-website.pdf</a>.
---------------------------------------------------------------------------
Additionally, the Professional fee structure in the Proposed Fee
Schedule is consistent with the Exchange Act because it advances the
public interest and investor protection by simplifying administration
and reducing compliance friction while maintaining broad access to
consolidated data on stable, predictable terms. In particular, by
collapsing legacy tape-by-tape tiers into a simpler Professional fee
approach, the Proposal reduces the operational burden on market data
recipients to track, classify, and report Professional usage under
multiple, tape-specific constructs. Reducing these administrative
burdens is ``necessary or appropriate'' to ``remove impediments to, and
perfect the mechanisms of, a national market system'' because
complexity and audit exposure operate as practical barriers to wider
distribution and use of consolidated data, particularly in investor-
facing contexts.
Moreover, contrary to the suggestion that the Proposal is solely
``repackaging'' fees, for a majority of customers, the applicable
Professional fees are either unchanged or reduced, with the principal
changes directed at simplification and administrability, rather than
increasing Professional charges. This design choice is consistent with
the Exchange Act because it supports fair and orderly markets and
investor protection by (i) limiting compliance-driven barriers that can
impede dissemination of core consolidated information, and (ii) making
the consolidated product easier to use and audit on an ongoing basis,
without changing fees merely because one legacy structure is replaced
with another.
Non-Professional Fees
The Operating Committee is proposing to decrease Non-Professional
Fees from the Existing Fee Schedule, proposing to adopt a tiered fee
structure that is based on Non-Professional usage.
Under the Current Schedules, Non-Professionals are charged $1 on
each of Tapes A, B, and C. The Proposed Fee Schedule introduces the
following sliding scale per Tape based on the number of Non-
Professionals reported:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Individuals engaged in Non-Professional use Current Proposed fee per
Non-Professional fee individual engaged
in Non-Professional
use
----------------------------------------------------------------------------------------------------------------
1............................................. 2,000 $1 $0.90
2,001......................................... 50,000 1 0.75
50,001........................................ 250,000 1 0.60
250,001....................................... 1,000,000 1 0.40
---------------------------------------------------------------------
1,000,001+ 1 0.25
----------------------------------------------------------------------------------------------------------------
The sliding scale operates in a manner similar to tax brackets,
where a subscriber will pay the per Non-Professional fee for the
portion of their Non-Professional customer base falling within each
tier before moving to the
[[Page 17035]]
next tier. For example, for the first 2,000 Non-Professionals, a
subscriber will be charged $0.90 per Non-Professional. For the next
tier (between 2,001 and 50,000 Non-Professionals), a subscriber will be
charged $0.75 per Non-Professional. The remaining tiers follow a
similar pattern. In establishing these tiers, the Operating Committee
reviewed reported Non-Professional user data and, based on current
usage levels, structured the tiers both to reflect existing patterns
and to incentivize increased Non-Professional use through achievable
thresholds.
Before arriving at the sliding scale proposed above, the Operating
Committee considered a number of alternative fee structures for Non-
Professional Fees, including a flat Non-Professional usage fee and a
tiered flat-fee approach where firms would be charged a flat fee based
on the number of reported Non-Professionals.
The Operating Committee ultimately decided on proposing the sliding
scale described above, which it believes will incentivize firms to
increase their dissemination to Non-Professionals and meet the goals of
the Governance Order to ensure the widespread availability of
consolidated data to investors. Based on the results of the
Consultant's second survey, respondents stated that they preferred a
Non-Professional model that rewarded scale and promoted fairness. The
Operating Committee believes that the proposed sliding scale aligns
with the results of the survey because the sliding scale ensures that
firms can take advantage of decreased pricing as their usage increases.
It is important to note the interaction between the Non-
Professional tiered fee schedule described above and the Enterprise Cap
described below. The Operating Committee adopted a tiered Non-
Professional pricing structure (rather than relying solely on a single
enterprise cap level) because Non-Professional usage among Data Feed
Recipients varies dramatically, i.e., a small number of firms sit at
the extreme high end of Non-Professional user counts, while most firms
are at materially lower levels. In that environment, setting one cap
that ``works for everyone'' is inherently difficult: a cap set low
enough to benefit firms with modest-to-moderate Non-Professional bases
would be reached almost immediately by the highest-volume firms, while
a cap set high enough to reflect the high-volume outliers would provide
little or no practical benefit to the majority of firms. The Proposed
Fee Schedule's sliding-scale tiers are designed to solve for that gap
by extending meaningful marginal-cost reductions (and thus more cap-
like benefits) to lower and mid-range user levels (where most firms
sit) while still providing a rational, scalable schedule for firms with
very large Non-Professional populations. This design supports Section
11A objectives by reducing barriers to broad retail distribution of
consolidated data without relying on a one-size-fits-all cap threshold.
The Proposed Fee Schedule's Non-Professional pricing is
competitively reasonable when evaluated against assembling a
consolidated TOB view by purchasing multiple proprietary exchange
products and integrating them internally. As detailed above, the
largest exchange families offer consolidated TOB products priced at
$1.00, $1.00, and $0.25 per Non-Professional user, while other
exchanges add charges such as $0.10 per Non-Professional user (for two
exchanges), $0.01 per Non-Professional user, and $500 per Data
Recipient (for two exchanges). Those inputs imply an estimated monthly
proprietary ``bundle'' cost of approximately $2.46 per Non-Professional
user plus $1,000 per Data Recipient. By contrast, the CT Plan's
combined Non-Professional pricing begins at $2.70 across Tapes A, B,
and C, and then declines with scale under the sliding scale (down to
$0.75 at the highest tier), while delivering a single consolidated
product that avoids the operational and compliance burdens associated
with stitching together multiple proprietary products. In that sense,
the Non-Professional fees are consistent with the Exchange Act because
they reflect a transparent, market-referenced pricing approach that
promotes broad retail availability of consolidated data on
administrable terms, in furtherance of Section 11A objectives.
Enterprise Cap
Under the Existing Fee Schedules, Tape A, Tape B, and Tape C offer
enterprise caps of $686,400, $520,000, and $648,000, respectively. For
Tape A and Tape B, the enterprise cap includes both Professional and
Non-Professional usage while Tape C includes only Non-Professional
usage. The Proposed Fee Schedule maintains a cap, but aligns the Tape A
and Tape B caps with the Tape C cap by eliminating Professionals from
inclusion in the cap. Because of the removal of Professionals from the
cap, the Operating Committee proposes reducing the Tape A cap from
$686,400 to $648,000 in order to align with the Tape C cap. Because the
Tape C cap already excludes Professionals, the Operating Committee
believes the Tape C cap is the appropriate level at which to set the
Tape A cap. Additionally, while the Tape B cap was at a lower level in
the Existing Fee Schedules than that of Tape A and Tape C, the
Operating Committee proposes reducing the Tape B cap by the same
percentage that the Tape A cap is reduced, such that the new Tape B cap
for Non-Professional usage will be $490,000.\22\
---------------------------------------------------------------------------
\22\ Unlike the other fees in the Proposed Fee Schedule, the
Operating Committee did not make a comparison between the proposed
Enterprise Cap and enterprise licenses offered by exchanges for
their proprietary data feeds. Given the differences in what is
permitted under the various enterprise licenses, the Operating
Committee did not believe that it is a relevant comparison.
---------------------------------------------------------------------------
The Operating Committee determined it was appropriate to maintain a
cap on Non-Professionals in order to incentivize continued widespread
availability of consolidated data to the same number of Non-
Professionals. The Operating Committee was concerned that, if a cap was
removed, the firms taking advantage of the cap today would decrease
their usage to ensure that their overall market data spend remained the
same. This would have resulted in decreased availability of the
consolidated data to Non-Professionals. This concern was supported by
the results of the Consultant's surveys.
The Proposed enterprise caps are consistent with the Exchange Act
and are not unreasonably discriminatory because they operate in tandem
with the tiered Non-Professional sliding scale to allocate benefits on
an objective, volume-based basis across all data recipients, rather
than conferring an advantage only on the very largest firms. As
commenters themselves recognize, Non-Professional usage levels vary
widely and only a subset of firms will reach any given cap. The
Operating Committee addressed this reality by pairing caps with a
declining marginal-rate schedule so that firms at lower- and mid-usage
levels (where most firms sit) receive meaningful pricing benefits
through lower tier rates, while very large firms receive additional
predictability and constraint through the cap once reached. This
structure promotes the Exchange Act objectives of broad availability of
consolidated data and administrable, equitable pricing because it
treats similarly situated recipients similarly (by usage volume), and
any differences in outcome flow from measurable differences in scale
rather than arbitrary classifications. The Operating Committee believes
it is also important to note that even for those firms falling within
the smallest usage tier, those firms would still see a decrease in
their per Non-Professional fee from $1.00 to $0.90.
[[Page 17036]]
The Operating Committee also decided to exclude Professional usage
from the enterprise cap because, in practice, including Professionals
allowed a subset of the largest firms (those with very large Non-
Professional user bases that can reach the cap) to realize an effective
reduction (or elimination) of Professional fees that smaller firms
could not access, solely by virtue of their retail scale. In the
Operating Committee's view, that dynamic can distort competition among
broker-dealers and vendors by advantaging firms that happen to have
large Non-Professional populations, even where their Professional usage
(and corresponding willingness to pay for professional-facing
consolidated data) is similar to peers. Separately, the Operating
Committee did not observe evidence that including Professionals in a
cap meaningfully advances a public-interest objective, i.e., it does
not appear to materially increase dissemination to Professionals, based
on the Plan's comparison of dissemination patterns where Tape A
historically included Professionals in the cap while Tape C did not,
yet Professional dissemination among cap-eligible firms was relatively
similar across those tapes. Accordingly, the Committee concluded that
retaining Professional inclusion in the cap would primarily operate as
a windfall for a limited set of large firms without a commensurate
benefit to investors or market quality, and that removing Professionals
from the cap better aligns the fee design with the Exchange Act
approval standard by promoting a more even competitive landscape while
preserving the cap's intended role in supporting broad retail
availability through Non-Professional pricing.
Further, the Operating Committee believes that reducing the caps
for Tape A and Tape B will help to offset increases in fees as a result
of removing Professional usage from the cap. In particular, with an
approximately $40,000 decrease in the Tape A cap and $30,000 decrease
in the Tape B cap, those firms effected by the proposed change would
have additional funds available to pay for new Professional usage fees
before seeing an increase in their combined Professional and Non-
Professional usage fees. Additionally, the Operating Committee believes
that the changes made to reduce administrative burden will help to
offset the potential increase in fees that these largest firms may
experience; these firms will most likely be the biggest beneficiaries
of the changes designed to reduce administrative burden.
Inflation-Adjusted Fees
The Operating Committee proposes an inflation-related adjustment to
certain of its fees for subscribing to the consolidated feed. The fees
include: (1) Non-Display Fees; (2) Access Fees; and (3) Redistribution
Fee. Under the Existing Fee Schedules, these fees are as follows:
----------------------------------------------------------------------------------------------------------------
Existing fee schedules
--------------------------------------------------------------------------
Tape A Tape B Tape C
----------------------------------------------------------------------------------------------------------------
Non-Display (Electronic Trading Last Sale: $2,000/ETS.. Last Sale: $1,000/ETS.. $3,500/ETS.
System (``ETS'')). Bid-Ask: $2,000/ETS.... Bid-Ask: $1,000/ETS....
Non-Display (Own Behalf)............. Last Sale: $2,000...... Last Sale: $1,000...... $3,500.
Bid-Ask: $2,000........ Bid-Ask: $1,000........
Non-Display (For Customer)........... Last Sale: $2,000...... Last Sale: $1,000...... $3,500.
Bid-Ask: $2,000........ Bid-Ask: $1,000........
Direct Access........................ Last Sale: $1,250...... Last Sale: $750........ $2,500.
Bid-Ask: $1,750........ Bid-Ask: $1,250........
Indirect Access...................... Last Sale: $750........ Last Sale: $400........ $500.
Bid-Ask: $1,250........ Bid-Ask: $600..........
Real-Time Redistributor.............. $1,000................. $1,000................. $1,000.
----------------------------------------------------------------------------------------------------------------
The Operating Committee proposes setting these fees to the
following levels: \23\
---------------------------------------------------------------------------
\23\ The definitions in the Proposed Fee Schedule have remained
the same unless noted elsewhere in this filing.
\24\ As part of the Proposed Fee Schedule, the Operating
Committee decided to offer the same optionality on Tape C that
previously existed on Tapes A and B, i.e., the ability to purchase
Last Sale or Bid-Ask without purchasing the other.
----------------------------------------------------------------------------------------------------------------
Proposed fee schedule
--------------------------------------------------------------------------
Tape A Tape B Tape C \24\
----------------------------------------------------------------------------------------------------------------
Non-Display (ETS) (Per ETS).......... Last Sale: $2,315...... Last Sale: $1,155...... Last Sale: $2,025.
Bid-Ask: $2,315........ Bid-Ask: $1,155........ Bid-Ask: $2,025.
Non-Display (Own Behalf)............. Last Sale: $2,315...... Last Sale: $1,155...... Last Sale: $2,025.
Bid-Ask: $2,315........ Bid-Ask: $1,155........ Bid-Ask: $2,025.
Non-Display (For Customer)........... Last Sale: $2,315...... Last Sale: $1,155...... Last Sale: $2,025.
Bid-Ask: $2,315........ Bid-Ask: $1,155........ Bid-Ask: $2,025.
Direct Access........................ Last Sale: $1,445...... Last Sale: $865........ Last Sale: $1,155.
Bid-Ask: $2,025........ Bid-Ask: $1,445........ Bid-Ask: $1,735.
Indirect Access...................... Last Sale: $865........ Last Sale: $460........ Last Sale: $230.
Bid-Ask: $1,445........ Bid-Ask: $695.......... Bid-Ask: $345.
Real-Time Redistributor.............. $1,155................. $1,155................. $1,155.
----------------------------------------------------------------------------------------------------------------
Of these fees, the latest one to be established/modified is the
Non-Display fee in 2014, with an effective date of January 1, 2015.\25\
The other fees have been in place even longer without adjustment. Over
the past decade, the
[[Page 17037]]
Members have expended significant resources to improve the operation of
the SIPs to meet customer expectations, including continued investment
in all aspects of the technology ecosystem (e.g., software, hardware,
and network). The Members continue to invest heavily in enhancing the
SIP for the benefit of its users, and these investments have increased
the performance of the SIPs. Yet the Operating Committee has not
adjusted any of the fees discussed in this section since at least 2014.
As discussed below, the Operating Committee proposes to adjust these
three fees by an industry- and product-specific inflationary measure.
It is reasonable and consistent with the Exchange Act for the Members
to recoup their investments, at least in part, by adjusting the fees
described herein. Continuing to operate at fees frozen at 2014 levels
impacts the Operating Committee's ability to enhance the SIP and the
interests of market participants and investors.
---------------------------------------------------------------------------
\25\ See Securities Exchange Act Release No. 73279 (Oct. 1,
2014), 79 FR 60522, (October 7, 2014).
---------------------------------------------------------------------------
Since 2015, the Security Information Processors (``SIPs'') have
committed significant resources and infrastructure to ensure the
ongoing support of the ever-increasing data needs of the Participants
and Data Recipients. For example, with respect to SIAC, the Processor
has increased system throughput (over 720 percent on CQS and 560
percent on CTS), processing nearly 250 percent more daily messages,
while reducing median latency by 95 percent. These statistics for are
reflected in the chart below:
------------------------------------------------------------------------
2015 2025
------------------------------------------------------------------------
System Capacity--MPMH *......... CTS--75K.......... CTS--425K
CQS--375k......... CQS--2.7M.
Peak Daily Messages............. CTS--56M on 8/24/ CTS--135M on 4/9
15. CQS--3.7B on 4/7.
CQS--1.3B on 12/14/
15.
Median System Latency........... CTS--450 CTS--18
microseconds. microseconds
CQS--350 CQS--17
microseconds. microseconds.
------------------------------------------------------------------------
* MPHM = Messages per 100 milliseconds.
Similar improvements have been made with respect to the UTP
Processor:
------------------------------------------------------------------------
2016 2025
------------------------------------------------------------------------
System Capacity--MPMH........... Trades--133K...... Trades--4.1M
Quotes--215K...... Quotes--5.4M.
Peak Daily Messages............. Trades--21M....... Trades--86M
Quotes--366M...... Quotes--1.4B.
Median System Latency........... Trades--485 Trades--12
microseconds. microseconds
Quotes--471 Quotes--11
microseconds. microseconds.
------------------------------------------------------------------------
These improvements in the Processors' services have coincided with
increased costs during the same time period, due to both investment and
inflation.
The fee increases the Operating Committee proposes in this section
are based on an industry-specific Producer Price Index (``PPI''), which
is a tailored measure of inflation.\26\ As a general matter, the PPI is
a family of indexes that measures the average change over time in
selling prices received by domestic producers of goods and services.
PPI measures price change from the perspective of the seller. This
contrasts with other metrics, such as the Consumer Price Index
(``CPI''), that measures price change from the purchaser's
perspective.\27\ About 10,000 PPIs for individual products and groups
of products are tracked and released each month.\28\ PPIs are available
for the output of nearly all industries in the goods-producing sectors
of the U.S. economy--mining, manufacturing, agriculture, fishing, and
forestry--as well as natural gas, electricity, and construction, among
others. The PPI program covers approximately 69 percent of the service
sector's output, as measured by revenue reported in the 2017 Economic
Census.
---------------------------------------------------------------------------
\26\ See <a href="https://fred.stlouisfed.org/series/PCU51825182#0">https://fred.stlouisfed.org/series/PCU51825182#0</a>, (as
viewed on December 7, 2025).
\27\ See <a href="https://www.bls.gov/ppi/overview.htm">https://www.bls.gov/ppi/overview.htm</a>.
\28\ Id.
---------------------------------------------------------------------------
For purposes of this proposal, the relevant industry-specific PPI
is the Data Processing and Related Services PPI (``Data PPI''), which
is an industry net-output PPI that measures the average change in
selling prices received by companies that provide data processing
services. The Data PPI was introduced in January 2002 by the Bureau of
Labor Statistics (``BLS'') as part of an ongoing effort to expand
Producer Price Index coverage of the services sector of the U.S.
economy and is identified as NAICS--518210 in the North American
Industry Classification System.\29\ According to the BLS ``[t]he
primary output of NAICS 518210 is the provision of electronic data
processing services. In the broadest sense, computer services companies
help their customers efficiently use technology. The processing
services market consists of vendors who use their own computer
systems--often utilizing proprietary software--to process customers'
transactions and data. Companies that offer processing services
collect, organize, and store a customer's transactions and other data
for record-keeping purposes. Price movements for the NAICS 518210 index
are based on changes in the revenue received by companies that provide
data processing services. Each month, companies provide net transaction
prices for a specified service. The transaction is an actual contract
selected by probability, where the price-determining characteristics
are held constant while the service is repriced. The prices used in the
index calculation are the actual prices billed for the selected service
contract.'' \30\
---------------------------------------------------------------------------
\29\ NAICS appears in table 5 of the PPI Detailed Report and is
available at <a href="https://data.bls.gov/timeseries/PCU518210518210">https://data.bls.gov/timeseries/PCU518210518210</a>.
\30\ See <a href="https://www.bls.gov/ppi/factsheets/producer-price-index-for-the-data-processing-and-related-services-industry-naics-518210.htm">https://www.bls.gov/ppi/factsheets/producer-price-index-for-the-data-processing-and-related-services-industry-naics-518210.htm</a>.
---------------------------------------------------------------------------
The Operating Committee believes the Data PPI is an appropriate
measure to be considered in the context of the proposal to modify the
fees described in
[[Page 17038]]
this section because the Members and the Processors use their ``own
computer systems'' and ``proprietary software,'' i.e., their own data
center and proprietary matching engine software, respectively, to
collect, organize, store and report customers' transactions in U.S.
equity securities. The production of consolidated market data depends
on intertwined, shared, and continually evolving investments across
multiple markets and systems by the Members and the Processors, e.g.,
market operations, technology, security, resiliency, surveillance/
compliance, testing and change management, and governance. In other
words, the Members and the Processors are in the business of data
processing and related services.
For purposes of the Proposed Fee Schedule, the Operating Committee
examined the Data PPI value for the period from January 2015 to May
2025.\31\ The Data PPI had a starting value of 101 in January 2015 and
an ending value of 124.185 in May 2025, a 15.95 percent increase. This
indicates that companies that are also in the data storage and
processing business have generally increased prices for a specified
service covered under NAICS 518210 by an average of 15.95 percent
during this period. Based on that percentage change, the Operating
Committee proposes to make a fee increase by up to 15.95 percent for
the fees described in this section, which reflects an increase covering
the entire period since the last adjustment was made.\32\
---------------------------------------------------------------------------
\31\ The Operating Committee utilized the data from the last
month that was not designated as Preliminary and potentially subject
to revision.
\32\ The Operating Committee rounded some fees downward to the
closest multiple of five.
---------------------------------------------------------------------------
The Operating Committee further believes the Data PPI is an
appropriate measure for purposes of the proposed rule change on the
basis that it is a stable metric with limited volatility, unlike other
consumer-side inflation metrics. In fact, the Data PPI has not
experienced a greater than 2.16 percent increase for any one calendar
year period since Data PPI was introduced into the PPI in January 2002.
The Operating Committee also believes that the proposed fees are
reasonable because the Non-Display fees for each Tape are comparable to
similar fees offered by the largest exchange families. While the
consolidated feeds provide more data than the exchange families' TOB
proprietary data feeds, the Operating Committee believes that these
products are helpful benchmarks in determining whether the proposed
fees are fair and reasonable.
The Proposed Fee Schedule's pricing for Non-Display, Access, and
Real-Time Redistribution is competitively reasonable in light of the
practical ``synthetic SIP'' alternative: a subscriber that elects not
to purchase a consolidated CT Plan product can assemble a consolidated
view by purchasing and integrating multiple proprietary exchange TOB
products, incurring parallel categories of fees (non-display
entitlements, connectivity/access charges, and redistribution rights)
across separate sources.
<bullet> For Non-Display, the Proposed Fee Schedule's total monthly
Non-Display Use fees across all Tapes and both Bid/Ask and Last Sale
for each category is $10,990. This amount is below comparable Non-
Display Use fees for proprietary TOB products; for instance, NYSE
charges a total Non-Display Use fee of $9,500 across its exchanges,
MIAX charges $1,000, and IEX and LTSE each charge $500/month per data
recipient. The charges from these exchanges alone exceed the Non-
Display Use fee in the Proposed Fee Schedule.\33\
---------------------------------------------------------------------------
\33\ It is important to note that Non-Display Use is not a
stand-alone category in each Exchange's fee schedule. As a result,
to simplify the comparison, the analysis does not include Exchanges
that might charge for Non-Display Use as part of other categories.
For instance, some Exchanges may charge access fees in lieu of
charging a Non-Display Use fee while other Exchanges may charge both
access fees and Non-Display Use fees.
---------------------------------------------------------------------------
<bullet> For Access fees, the Proposed Fee Schedule's total monthly
Direct Access fees across all Tapes and both Bid/Ask and Last Sale are
approximately $8,500, and total Indirect Access fees are approximately
$3,953, both below what a subscriber would pay to obtain comparable
access rights across proprietary TOB products feeds, where the largest
exchange families alone charge $6,250, $1,600, and $1,500 (before
accounting for additional venues).
<bullet> And for Real-Time Redistribution, the Proposed Fee
Schedule's aggregate redistributor fee across all Tapes is
approximately $3,400, which is likewise below the comparable
proprietary redistributor charges: again, the largest exchange families
alone charge $2,500, $2,080, and $5,000.
In this sense, the Proposal's consolidated fees are at or below the
cost of assembling and maintaining a comparable multi-source
proprietary bundle, while also sparing subscribers the substantial
operational and compliance burden of contracting for, integrating,
entitling, and administering many separate proprietary products.
SIFMA and Fidelity argue that proprietary TOB products cannot
meaningfully constrain consolidated market data pricing because each
exchange is the sole source of its own proprietary feed and because
proprietary TOB products are ``fragmented'' and ``cater to'' different
use cases than SIP data. That critique overstates the degree to which
TOB products are economically insulated from competition. While each
venue is the exclusive source of its own data, TOB products are
designed for basic, indicative usage (best bid/offer and last sale) and
are frequently consumed for inexact price discovery and market color
rather than for venue-specific microstructure signals. In that common
usage, TOB feeds are meaningfully substitutable with each other: a
subscriber seeking indicative view of the market can often replace one
exchange's TOB feed with another, particularly among the largest
exchange families, whose quotes and trades are generally indicative of
broader market conditions, and many users evaluate these products as
part of a ``bundle'' decision where price and total cost of ownership
drive substitution, downgrade, or non-purchase at the margin. In that
sense, TOB products compete with each other on price and package
economics for baseline market-view functionality, even if they are not
perfect substitutes in every use case. The Subcommittee's outreach and
survey work supports the Operating Committee's conclusion that TOB
products are, in practice, being used as substitutes for (and
increasingly in place of) consolidated products, particularly where the
consolidated products' licensing terms, administrative obligations, and
audit exposure make them comparatively costly to implement and
maintain.
For many common ``indicative price'' use cases, i.e., obtaining a
contemporaneous best-bid/best-offer and last-sale view for broad market
color rather than venue-specific signals, proprietary TOB products are
readily fungible with one another because they are designed to convey
the same core pricing information and, as a practical matter, their
displayed prices closely track across venues. In that environment, a
market participant that needs an indicative quote/trade reference can
often substitute one exchange family's TOB feed for another (or for a
different bundle composition) with little to no meaningful change in
the indicative pricing signal, making these TOB products competitive
alternatives to each other for baseline
[[Page 17039]]
market-view functionality even if they are not perfect substitutes for
all latency-sensitive or venue-specific analytics.
Accordingly, where the consolidated product is priced competitively
relative to the cost of assembling a ``synthetic SIP'' from proprietary
TOB inputs, the Commission may reasonably consider that competitive
context as part of the ``fair and reasonable'' analysis, without
accepting the premise that only a cost-of-service showing is relevant.
Considering this market-based evidence supports a finding that the
Proposal is ``necessary or appropriate in the public interest'' and
``to remove impediments to, and perfect the mechanisms of, a national
market system,'' because fees that are competitive with realistic
alternatives reduce incentives to abandon consolidated products and
thereby support broad availability of core consolidated information.
Commenters urge the Commission to apply a ``reasonable relation to
costs'' standard and to require the CT Plan to provide public cost
breakdowns and revenue data, arguing that, absent such information, the
Commission cannot find the Proposal consistent with the Exchange
Act.\34\ The Operating Committee respectfully disagrees that a public,
line-item cost-of-service showing is a necessary predicate to approval
of an NMS plan fee amendment. Consistent with Commission staff guidance
on fee filings, a filing may appropriately evaluate reasonableness
through transparent discussion of competitive conditions and
alternatives.\35\
---------------------------------------------------------------------------
\34\ See SIFMA Letter; Fidelity Letter.
\35\ See SEC Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019). With respect to considering the reasonableness of
proposed services and fees offered by exchange, the Commission's
market-based test considers ``whether the exchange was subject to
significant competitive forces in setting the terms of its proposal
. . . , including the level of any fees''--the Operating Committee
believes that this rationale appropriately applies to NMS Plan fee
filings as well. See Securities Exchange Act Release No. 90209
(October 15, 2020), 85 FR 67044, 67049 (October 21, 2020) (Order
Granting Accelerated Approval to Establish a Wireless Fee Schedule
Setting Forth Available Wireless Bandwidth Connections and Wireless
Market Data Connections) (SR-NYSE-2020-05, SR-NYSEAMER-2020-05, SR-
NYSEARCA-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-03, SR-NYSE-
2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-NYSECHX-2020-
05, SR-NYSENAT-2020-08) (``Wireless Approval Order''), citing
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR
74770, 74781 (December 9, 2008) (``2008 ArcaBook Approval Order'').
See NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010). Since the
fees proposed herein are subject to significant competitive forces
vis-[agrave]-vis TOB products, the Commission should conclude that
the Proposed Fee Schedule is consistent with the Exchange Act
``unless `there is a substantial countervailing basis to find that
the terms' of the proposal violate the Act or the rules
thereunder.'' See Wireless Approval Order, supra note 35, at 67049,
citing 2008 ArcaBook Approval Order, supra note 35, at 74781. No
substantial countervailing basis exists here.
---------------------------------------------------------------------------
The Operating Committee believes that a strict cost-of-service
showing is not required for Commission review of the Proposed Fee
Schedule, and that the Commission may properly evaluate the fairness
and reasonableness of market information fees using a more flexible
approach grounded in the Exchange Act's Section 11A objectives and the
competitive context in which consolidated data is offered. As the
Commission explained in its Market Information Concept Release,
``Congress did not require the Commission to undertake a similar,
strictly cost-of-service (or `ratemaking') approach to its review of
market information fees in every case,'' and ``granted the Commission
some flexibility in evaluating the fairness and reasonableness of
market information fees,'' because Section 11A sets forth general
findings and objectives for the national market system and directs the
Commission to act accordingly in overseeing its development.\36\ The
Commission further noted that ``[s]uch an inflexible standard, although
unavoidable in some contexts, can entail severe practical
difficulties,'' and therefore ``allowed the Commission to adopt a more
flexible approach than ratemaking.'' \37\ Consistent with that
framework, the Operating Committee believes it is appropriate for the
Commission to consider evidence regarding market alternatives,
competitive constraints, and administrability in assessing whether the
Proposed Fee Schedule is fair and reasonable and not unreasonably
discriminatory under Section 11A and Regulation NMS.
---------------------------------------------------------------------------
\36\ See SEC, Regulation of Market Information Fees and
Revenues, Exchange Act Release No. 34-42208 (Dec. 9, 1999) (``Market
Information Concept Release'').
\37\ Id.
---------------------------------------------------------------------------
Further, the kind of ``cost-based'' proof commenters request is not
only unnecessary as a categorical matter, but also not a reliable
metric for consolidated data in practice. Any ``cost to collect,
consolidate, and disseminate'' necessarily implicates far more than the
Processor/Administrator's direct operating expenses. The production of
consolidated market data depends on intertwined, shared, and
continually evolving investments across multiple markets and systems,
e.g., market operations, technology, security, resiliency,
surveillance/compliance, testing and change management, and governance,
costs that are not captured by a narrow ``processor-only'' accounting,
and that would be allocated differently depending on each Member's
internal cost-accounting conventions and assumptions.\38\ A strict
cost-of-service exercise therefore risks becoming an arbitrary
allocation dispute rather than a meaningful test of fee reasonableness.
For that reason, the Operating Committee believes the more appropriate
metric is a market- and usage-focused assessment grounded in
competitive context (including how subscribers evaluate substitutes and
switching).
---------------------------------------------------------------------------
\38\ See id. (``Plan costs do not, however, include any of the
costs incurred by the individual SROs in generating market
information and providing it to the Plan processors. The Commission
is considering an approach that would include many of these SRO
costs--specifically, the costs of operating and regulating their
markets in accordance with Exchange Act requirements--as part of the
cost of providing market information to the public.'').
---------------------------------------------------------------------------
Aligning and Eliminating Fees
As part of reconciling the fee schedules across Tapes A, B, and C,
the Operating Committee identified certain fees that were charged as
part of one fee schedule but not the other. With respect to these fees,
the Operating Committee reviewed the fees, determined their purpose,
and decided whether to align the fee across all three Tapes or to
eliminate the fee from the fee schedule.
For instance, Tapes A and B charge a Multiple Feed Charge, while
Tape C does not have a corresponding charge. The fee is currently
assessed for each data feed that a data recipient receives in excess of
the data recipient's receipt of one primary data feed and one backup
data feed. Due to the additional administrative burden associated with
maintaining additional feeds, the Operating Committee believes it is
appropriate to maintain this fee in the combined fee schedule and
expand the fee to apply to Tape C.
Additionally, Tapes A and B charge a Late/Clearly Erroneous
Reporting Charge, which is assessed for each month in which there is a
failure to provide a network's required data-usage report to the
administrator. Tape C does not contain a similar charge. The Operating
Committee believes that this fee is appropriate to incentivize data
recipients to correctly report their usage to the administrator and to
offset the additional costs associated with incorrect reporting.
Finally, Tapes A and B charge a Non-Compliance Fee where market
data recipients display consolidated volume (not subject to a charge),
where such display appears on the same screen as
[[Page 17040]]
bid-asked quotes or last-sale prices that are not consolidated quotes
or prices under the CTA Plan or CQ Plan, and the market data recipient
fails to conspicuously display a clarifying statement (the ``Display
Statement'') that reads ``Realtime quote and/or trade prices are not
sourced from all markets.'' The Operating Committee believes that the
Display Statement ensures that subscribers are not confused when the
consolidated volume is from all markets while the real-time quote and/
or trade prices are not a consolidated view. The Non-Compliance Fee
ensures that market data recipients are incentivized to properly
include the Display Statement in order to reduce market confusion.
The proposed harmonizing changes discussed above are consistent
with the Commission's approval standard for NMS plan amendments because
they are necessary or appropriate in the public interest, for the
protection of investors and the maintenance of fair and orderly
markets, and to remove impediments to, and perfect the mechanisms of, a
national market system. Each change addresses practical administration
and transparency issues that directly affect the integrity and
workability of consolidated market data billing, compliance, and
investor-facing presentation, as reflected in the Proposed Fee
Schedule.
More specifically, expanding the Multiple Feed Charge to Tape C is
a reasonable, administrable way to recognize the incremental
operational and administrative burden associated with maintaining more
than one primary and one backup feed (e.g., additional onboarding,
monitoring, entitlements/billing administration, troubleshooting, and
support), while still preserving redundancy by permitting a primary and
backup feed without penalty. Similarly, a Late/Clearly Erroneous
Reporting Charge promotes fair and orderly markets and equitable
administration of consolidated data fees by incentivizing accurate and
timely usage reporting and by helping offset the additional
administrative costs caused by late or incorrect reporting. Finally,
the Display Statement/Non-Compliance Fee framework is investor-
protective: where a recipient displays consolidated volume alongside
non-consolidated quotes/trades, a conspicuous clarifying statement
reduces the risk of customer confusion about whether displayed prices
reflect ``all markets,'' and the non-compliance charge is designed to
create an effective incentive to provide that disclosure consistently.
These harmonizing provisions therefore improve administrability and
reduce confusion without changing the underlying economics of the data
product itself, thereby furthering the purposes of the Exchange Act
Additionally, as part of the reconciliation process, the Operating
Committee proposes eliminating certain fees that were previously
charged by the CQ/CTA Plans or UTP Plan. For example, Tape C has a
Delayed Redistributor fee of $250, while Tape A and Tape B do not have
a similar charge. The Operating Committee proposes removing this fee
for Tape C. Additionally, Tape C charges a Delayed Data \39\ Access Fee
of $250 per year, while Tape A and Tape B do not have a similar charge.
The Operating Committee proposes removing this fee for Tape C. Finally,
Tape C has a Per Voice Response Port fee of $21.25 per port, while Tape
A and Tape B do not have a similar charge. The Operating Committee
proposes removing this fee for Tape C.
---------------------------------------------------------------------------
\39\ The delay period for converting real-time information into
Delayed Data is 15 minutes after the information is first made
available.
---------------------------------------------------------------------------
The Operating Committee believes eliminating these fees is
consistent with the Exchange Act because these changes promote a more
uniform, transparent, and administrable consolidated market data fee
framework that helps ``remove impediments to, and perfect the
mechanisms of, a national market system.'' In particular, these Tape C-
only charges are not imposed for comparable delayed redistribution,
delayed access, or voice-response functionality on Tape A or Tape B,
and their continued existence would perpetuate avoidable tape-by-tape
fee asymmetries that increase compliance friction, entitlement
complexity, and audit risk for similarly situated recipients. By
eliminating these fees, the Proposed Fee Schedule treats comparable
delayed uses and legacy delivery channels consistently across all three
Tapes, reduces unnecessary administrative burden associated with
maintaining tape-specific legacy charges, and thereby supports the
statutory objectives of promoting the widespread availability of
consolidated market data and maintaining fair and orderly markets
through clear, non-discriminatory fee terms.
2. Governing or Constituent Documents
Not applicable.
3. Implementation of Amendments
The amendments proposed herein would be implemented following
Commission approval and to coincide with the transition from the CQ/
CTA/UTP Plans to the CT Plan.
4. Development and Implementation Phases
Not applicable.
5. Analysis of Impact on Competition
The Operating Committee believes that the proposed fee schedule is
fair and reasonable.
First, in the two surveys conducted by the Consultant, market
participants repeatedly stated that they were looking for the Operating
Committee to reduce their administrative burdens and lessen their audit
risk. From the surveys, the top three suggestions from market
participants were to (1) address the professional versus non-
professional definitions, (2) remove references to outdated
terminology, and (3) add clarity to definitions to reduce potential
audit risk. The Operating Committee believes that the Proposed Fee
Schedule addresses each of these concerns. In particular, as described
above, the Operating Committee made the following changes to reduce
administrative burdens:
1. Modifying the Professional and Non-Professional definitions and
adding a safe harbor to reduce audit risk;
2. Modifying the Direct and Indirect Access definitions;
3. Eliminating fee liability for Single Security Derived Data and
incorporating the creation of Derived Data into Non-Display Use; and
4. Aligning definitions and non-billable services between Tapes A,
B, and C.
The Operating Committee believes that these changes will reduce
unnecessary burdens on competition and simplify the fee schedule,
thereby reducing potential audit risk of market data recipients.
With respect to the level of fees proposed herein, the Operating
Committee believes that the Proposed Fee Schedule is fair and
reasonable based on three reasons: (1) the current fees do not properly
reflect the quality of the services and products, as fees for the
services and products in question have been static in nominal terms,
and therefore falling in real terms due to inflation; (2) the Operating
Committee believes that investments made in enhancing the capacity and
speed of the SIP systems increase the performance of the services and
products; and (3) the fees are comparable to alternative proprietary
data products that compete with the consolidated feeds.
Commenters urge the Commission to apply a ``reasonable relation to
costs'' standard and to require the CT Plan to
[[Page 17041]]
provide public cost breakdowns and revenue data, arguing that, absent
such information, the Commission cannot find the Proposal consistent
with the Exchange Act.\40\ The Operating Committee respectfully
disagrees that a public, line-item cost-of-service showing is a
necessary predicate to approval of an NMS plan fee amendment.
Consistent with Commission staff guidance on fee filings, a filing may
appropriately evaluate reasonableness through transparent discussion of
competitive conditions and alternatives.\41\
---------------------------------------------------------------------------
\40\ See SIFMA Letter; Fidelity Letter.
\41\ See SEC Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019).
---------------------------------------------------------------------------
Further, the kind of ``cost-based'' proof commenters request is not
only unnecessary as a categorical matter, but also not a reliable
metric for consolidated data in practice. Any ``cost to collect,
consolidate, and disseminate'' necessarily implicates far more than the
Processor/Administrator's direct operating expenses. The production of
consolidated market data depends on intertwined, shared, and
continually evolving investments across multiple markets and systems,
e.g., market operations, technology, security, resiliency,
surveillance/compliance, testing and change management, and governance,
costs that are not captured by a narrow ``processor-only'' accounting,
and that would be allocated differently depending on each participant's
internal cost-accounting conventions and assumptions. A strict cost-of-
service exercise therefore risks becoming an arbitrary allocation
dispute rather than a meaningful test of fee reasonableness. For that
reason, the Operating Committee believes the more appropriate metric is
a market- and usage-focused assessment grounded in competitive context
(including how subscribers evaluate substitutes and switching).
The Subcommittee's outreach and survey work support the Operating
Committee's conclusion that proprietary exchange data products are, in
practice, being used as substitutes for (and increasingly in place of)
consolidated products, particularly where the consolidated products'
licensing terms, administrative obligations, and audit exposure make
them comparatively costly to implement and maintain. As a result of the
surveys conducted by the Consultant, the Operating Committee believes
that the fees proposed herein are constrained by significant
competitive forces. The survey respondents indicated that they were
replacing or considering replacement of the SIP as well as utilizing
delayed data where possible. Specifically, the survey results indicated
that over 70 percent of survey respondents were replacing the SIP with
proprietary data products in at least some use cases. Additionally,
Fintech survey respondents indicated that they were taking advantage of
enterprise licenses offered by proprietary data products as opposed to
utilizing the SIP. The Proposed Fee Schedule is designed to address the
concerns raised by respondents in explaining their shift from the
consolidated feed to proprietary data products, and therefore increase
the competitiveness of the consolidated feed vis-[agrave]-vis the
proprietary TOB data products.
The Operating Committee seeks to lower or hold certain displayed-
usage fees and to simplify key terms specifically to ``prevent further
attrition from SIP data'' to proprietary feeds, an assessment informed
by the Subcommittee's fact-gathering and survey efforts described
above.\42\ The Subcommittee's outreach and survey work support the
Operating Committee's view that competitive alternatives are relevant
to the Commission's evaluation of fee reasonableness and to the
Proposal's emphasis on reducing administrative friction that can drive
switching behavior.
---------------------------------------------------------------------------
\42\ Commenters' own submissions reinforce that this migration
dynamic exists even as they dispute how much weight it should carry:
Massive states that the Operating Committee's survey data ``confirms
that market participants are migrating toward proprietary
alternatives'' given the restrictiveness of existing policies, while
SIFMA acknowledges the Proposal's stated objective to avoid
attrition to proprietary feeds even as it challenges the
appropriateness of proprietary feeds as a benchmark.
---------------------------------------------------------------------------
As noted above, the fees being increased in this proposal have not
been set or increased since 2014, potentially much earlier. However, in
the years following the last change, the Members have made significant
investments in upgrades to their own and the SIPs' systems, enhancing
the quality of its services. Between 2015 and 2025, the cumulative
inflation rate of Data PPI was 15.95 percent. The Operating Committee
believes the Data PPI is a reasonable metric to base fee increases on
because it is targeted to producer-side increases in the data
processing industry, which based on the definition adopted by BLS would
include the consolidated data feed. Notwithstanding inflation, as noted
above, the market data fees at issue have not increased for over ten
years.
Additionally, the Operating Committee believes that the proposed
fees are equitably allocated and not unfairly discriminatory because
they would apply to all data recipients that choose to subscribe to the
consolidated feed. The only exception to this general rule is that the
Operating Committee does offer a sliding scale for Non-Professional
usage as well as a cap on Non-Professional usage. The Operating
Committee believes that the sliding scale is appropriate in order to
incentivize the dissemination of the consolidated feed to Non-
Professionals, where deeper discounts are provided as dissemination
increases. Additionally, the Operating Committee believes that the cap
is appropriate in order to prevent decreased dissemination by those
firms currently taking advantage of the Enterprise Cap. Based on survey
results, the Operating Committee was concerned that the firms taking
advantage of the Enterprise Cap would decrease their dissemination of
the consolidated feed to Non-Professionals in order to maintain current
spending levels. Maintaining a cap potentially prevents that decrease.
The Operating Committee proposes to remove Professionals from inclusion
in the caps because the Operating Committee believes that such
inclusion would be unfairly discriminatory; it was unclear why larger
firms should pay decreased or no Professional Usage fees simply because
those same firms had a significant Non-Professional customer base.
The Operating Committee believes that the Proposed Fee Schedule's
pricing for Non-Display, Access, and Real-Time Redistribution is
competitively reasonable in light of the practical ``synthetic SIP''
alternative: a subscriber that elects not to purchase a consolidated CT
Plan product can assemble a consolidated view by purchasing and
integrating multiple proprietary exchange TOB products, incurring
parallel categories of fees (non-display entitlements, connectivity/
access charges, and redistribution rights) across separate sources.
<bullet> For Non-Display, exchanges commonly charge at least $1,000
per month for non-display use of proprietary products, with some
charging $5,000; aggregating those proprietary non-display entitlements
across exchanges would exceed the Proposed Fee Schedule's consolidated
Non-Display fees for a single CT Plan Tape product.
<bullet> For Access fees, the Proposed Fee Schedule's total monthly
Direct Access fees across all Tapes and both Bid/Ask and Last Sale are
approximately $8,500, and total Indirect Access fees are approximately
$3,953, both below what
[[Page 17042]]
a subscriber would pay to obtain comparable access rights across
proprietary feeds, where the largest exchange families alone charge
$6,250, $1,600, and $1,500 (before accounting for additional venues).
<bullet> And for Real-Time Redistribution, the Proposed Fee
Schedule's aggregate redistributor fee across all Tapes is
approximately $3,400, which is likewise below the comparable
proprietary redistributor charges; again, the largest exchange families
alone charge $2,500, $2,080, and $5,000.
In this sense, the Proposal's consolidated fees are at or below the
cost of assembling and maintaining a comparable multi-source
proprietary bundle, while also sparing subscribers the substantial
operational and compliance burden of contracting for, integrating,
entitling, and administering many separate proprietary products.
SIFMA and Fidelity argue that proprietary TOB products cannot
meaningfully constrain consolidated market data pricing because each
exchange is the sole source of its own proprietary feed and because
proprietary TOB products are ``fragmented'' and ``cater to'' different
use cases than SIP data. That critique overstates the degree to which
TOB products are economically insulated from competition. While each
venue is the exclusive source of its own data, TOB products are
designed for basic, indicative usage (best bid/offer and last sale) and
are frequently consumed for inexact price discovery and market color
rather than for venue-specific microstructure signals. In that common
usage, TOB feeds are meaningfully substitutable with each other: a
subscriber seeking indicative view of the market can often replace one
exchange's TOB feed with another, particularly among the largest
exchange families, whose quotes and trades are generally indicative of
broader market conditions, and many users evaluate these products as
part of a ``bundle'' decision where price and total cost of ownership
drive substitution, downgrade, or non-purchase at the margin. In that
sense, TOB products compete with each other on price and package
economics for baseline market-view functionality, even if they are not
perfect substitutes in every use case. The Subcommittee's outreach and
survey work supports the Operating Committee's conclusion that TOB
products are, in practice, being used as substitutes for (and
increasingly in place of) consolidated products, particularly where the
consolidated products' licensing terms, administrative obligations, and
audit exposure make them comparatively costly to implement and
maintain.
For many common ``indicative price'' use cases, i.e., obtaining a
contemporaneous best-bid/best-offer and last-sale view for broad market
color rather than venue-specific signals, proprietary TOB products are
readily fungible with one another because they are designed to convey
the same core pricing information and, as a practical matter, their
displayed prices closely track across venues. In that environment, a
market participant that needs an indicative quote/trade reference can
often substitute one exchange family's TOB feed for another (or for a
different bundle composition) with little to no meaningful change in
the indicative pricing signal, making these TOB products competitive
alternatives to each other for baseline market-view functionality even
if they are not perfect substitutes for all latency-sensitive or venue-
specific analytics.
Accordingly, where the consolidated product is priced competitively
relative to the cost of assembling a ``synthetic SIP'' from proprietary
TOB inputs, the Commission may reasonably consider that competitive
context as part of the ``fair and reasonable'' analysis, without
accepting the premise that only a cost-of-service showing is relevant.
Considering this market-based evidence supports a finding that the
Proposal is ``necessary or appropriate in the public interest'' and
``to remove impediments to, and perfect the mechanisms of, a national
market system,'' because fees that are competitive with realistic
alternatives reduce incentives to abandon consolidated products and
thereby support broad availability of core consolidated information.
Commenters urge the Commission to apply a ``reasonable relation to
costs'' standard and to require the CT Plan to provide public cost
breakdowns and revenue data, arguing that, absent such information, the
Commission cannot find the Proposal consistent with the Exchange
Act.\43\ The Operating Committee respectfully disagrees that a public,
line-item cost-of-service showing is a necessary predicate to approval
of an NMS plan fee amendment. Consistent with Commission staff guidance
on fee filings, a filing may appropriately evaluate reasonableness
through transparent discussion of competitive conditions and
alternatives.\44\
---------------------------------------------------------------------------
\43\ See SIFMA Letter; Fidelity Letter.
\44\ See SEC Staff Guidance on SRO Rule Filings Relating to Fees
(May 21, 2019). With respect to considering the reasonableness of
proposed services and fees offered by exchange, the Commission's
market-based test considers ``whether the exchange was subject to
significant competitive forces in setting the terms of its proposal
. . . , including the level of any fees''--the Operating Committee
believes that this rationale appropriately applies to NMS Plan fee
filings as well. See Securities Exchange Act Release No. 90209
(October 15, 2020), 85 FR 67044, 67049 (October 21, 2020) (Order
Granting Accelerated Approval to Establish a Wireless Fee Schedule
Setting Forth Available Wireless Bandwidth Connections and Wireless
Market Data Connections) (SR-NYSE-2020-05, SR-NYSEAMER-2020-05, SR-
NYSEARCA-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-03, SR-NYSE-
2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-NYSECHX-2020-
05, SR-NYSENAT-2020-08) (``Wireless Approval Order''), citing
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR
74770, 74781 (December 9, 2008) (``2008 ArcaBook Approval Order'').
See NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010). Since the
fees proposed herein are subject to significant competitive forces
vis-[agrave]-vis TOB products, the Commission should conclude that
the Proposed Fee Schedule is consistent with the Act ``unless `there
is a substantial countervailing basis to find that the terms' of the
proposal violate the Act or the rules thereunder.'' See Wireless
Approval Order, supra note 35, at 67049, citing 2008 ArcaBook
Approval Order, supra note 35, at 74781. No substantial
countervailing basis exists here.
---------------------------------------------------------------------------
The Operating Committee believes that a strict cost-of-service
showing is not required for Commission review of the Proposed Fee
Schedule, and that the Commission may properly evaluate the fairness
and reasonableness of market information fees using a more flexible
approach grounded in the Exchange Act's Section 11A objectives and the
competitive context in which consolidated data is offered. As the
Commission explained in its Market Information Concept Release,
``Congress did not require the Commission to undertake a similar,
strictly cost-of-service (or `ratemaking') approach to its review of
market information fees in every case,'' and ``granted the Commission
some flexibility in evaluating the fairness and reasonableness of
market information fees,'' because Section 11A sets forth general
findings and objectives for the national market system and directs the
Commission to act accordingly in overseeing its development.\45\ The
Commission further noted that ``[s]uch an inflexible standard, although
unavoidable in some contexts, can entail severe practical
difficulties,'' and therefore ``allowed the Commission to adopt a more
flexible approach than ratemaking.'' \46\ Consistent with that
framework, the Operating Committee believes it is appropriate for the
Commission to consider evidence regarding market alternatives,
competitive constraints, and
[[Page 17043]]
administrability in assessing whether the Proposed Fee Schedule is fair
and reasonable and not unreasonably discriminatory under Section 11A
and Regulation NMS.
---------------------------------------------------------------------------
\45\ See SEC, Regulation of Market Information Fees and
Revenues, Exchange Act Release No. 34-42208 (Dec. 9, 1999) (``Market
Information Concept Release'').
\46\ Id.
---------------------------------------------------------------------------
Further, the kind of ``cost-based'' proof commenters request is not
only unnecessary as a categorical matter, but also not a reliable
metric for consolidated data in practice. Any ``cost to collect,
consolidate, and disseminate'' necessarily implicates far more than the
Processor/Administrator's direct operating expenses. The production of
consolidated market data depends on intertwined, shared, and
continually evolving investments across multiple markets and systems,
e.g., market operations, technology, security, resiliency,
surveillance/compliance, testing and change management, and governance,
costs that are not captured by a narrow ``processor-only'' accounting,
and that would be allocated differently depending on each Member's
internal cost-accounting conventions and assumptions.\47\ A strict
cost-of-service exercise therefore risks becoming an arbitrary
allocation dispute rather than a meaningful test of fee reasonableness.
For that reason, the Operating Committee believes the more appropriate
metric is a market- and usage-focused assessment grounded in
competitive context (including how subscribers evaluate substitutes and
switching).
---------------------------------------------------------------------------
\47\ See id. (``Plan costs do not, however, include any of the
costs incurred by the individual SROs in generating market
information and providing it to the Plan processors. The Commission
is considering an approach that would include many of these SRO
costs--specifically, the costs of operating and regulating their
markets in accordance with Exchange Act requirements--as part of the
cost of providing market information to the public.'').
---------------------------------------------------------------------------
With respect to the Enterprise Cap, the Operating Committee
believes that it is fair and reasonable to exclude Professional usage
from the enterprise cap because, in practice, including Professionals
allowed a subset of the largest firms (those with very large Non-
Professional user bases that can reach the cap) to realize an effective
reduction (or elimination) of Professional fees that smaller firms
could not access, solely by virtue of their retail scale. In the
Operating Committee's view, that dynamic can distort competition among
broker-dealers and vendors by advantaging firms that happen to have
large Non-Professional populations, even where their Professional usage
(and corresponding willingness to pay for professional-facing
consolidated data) is similar to peers. Separately, the Operating
Committee did not observe evidence that including Professionals in a
cap meaningfully advances a public-interest objective, i.e., it does
not appear to materially increase dissemination to Professionals, based
on the Plan's comparison of dissemination patterns where Tape A
historically included Professionals in the cap while Tape C did not,
yet Professional dissemination among cap-eligible firms was relatively
similar across those tapes. Accordingly, the Committee concluded that
retaining Professional inclusion in the cap would primarily operate as
a windfall for a limited set of large firms without a commensurate
benefit to investors or market quality, and that removing Professionals
from the cap better aligns the fee design with the Exchange Act
approval standard by promoting a more even competitive landscape while
preserving the cap's intended role in supporting broad retail
availability through Non-Professional pricing.
6. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan
No change as a result of amendment.
7. Approval by Sponsors in Accordance With Plan
Section 4.3(b) provides that ``[a]ll actions of the Operating
Committee will require an affirmative vote of not less than (\2/3\rd)
two-thirds of all votes allocated in the manner described in Section
4.3(a) to Voting Representatives who are eligible to vote on such
action.''
The Members have executed this Amendment and represent not less
than (\2/3\rd) two-thirds of all votes allocated in the manner
described in Section 4.3(a) of the CT Plan to Voting Representatives
who are eligible to vote on such action.
8. Description of Operation of Facility Contemplated by the Proposed
Amendment
No change as a result of amendment.
9. Terms and Conditions of Access
No change as a result of amendment.
10. Method of Determination and Imposition, and Amount of, Fees and
Charges
Please refer above for a description of the Operating Committee's
determination and imposition and amount of fees and charges.
11. Method and Frequency of Processor Evaluation
No change as a result of amendment.
12. Dispute Resolution
No change as a result of amendment.
(b) Rule 601(a)
1. Equity Securities and Nasdaq Securities for Which Transaction
Reports Shall Be Required by the Plan
No change as a result of amendment.
2. Reporting Requirements
No change as a result of amendment.
3. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information
No change as a result of amendment.
4. Manner of Consolidation
No change as a result of amendment.
5. Standards and Methods Ensuring Promptness, Accuracy and Completeness
of Transaction Reports
No change as a result of amendment.
6. Rules and Procedures Addressed to Fraudulent or Manipulative
Dissemination
No change as a result of amendment.
7. Terms of Access to Transaction Reports
No change as a result of amendment.
8. Identification of Marketplace of Execution
No change as a result of amendment.
III. Summary of Comments
The Commission received comment letters, which expressed concerns
with the Fee Proposal \48\ and urged careful scrutiny.\49\ One
commenter stated that the CT Plan has retained the Equity Data Plans'
model of charging SIP data fees to retail customers on a per investor
basis and to broker-dealers via a myriad of additional fees, such as
display fees, non-display fees, access fees, for use of the exact same
data and proposed to maintain a complex pricing model.\50\ However,
commenters also praised the Operating Committee for the effort to
develop a unified fee structure \51\ and reduce administration
burdens.\52\
[[Page 17044]]
Specific issues raised by commenters are discussed below. As noted
above, the Operating Committee provided its responses to commenters as
part of Amendment No. 1.\53\
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\48\ See Letters from Roberto Braceras, General Counsel,
Fidelity Investments, dated Jan. 21, 2026 (``Fidelity Letter'') at
2; Stan Sater, Senior Legal Counsel, <a href="http://Massive.com">Massive.com</a>, Inc. dated Jan.
21, 2026 (``Massive Letter'') at 2; Katie Kolchin, CFA, Managing
Director, Head of Equity and Options Market Structure and Gerald
O'Hara, Vice President & Assistant General Counsel, SIFMA, dated
Feb. 20, 2026 (``SIFMA Letter II'') at 2.
\49\ See Letter from Katie Kolchin, CFA, Managing Director, Head
of Equity and Options Market Structure and Gerald O'Hara, Vice
President & Assistant General Counsel, SIFMA, dated Jan. 21, 2026 at
1.
\50\ See Fidelity Letter at 4.
\51\ See Massive Letter at 1; Fidelity Letter at 2.
\52\ See Fidelity Letter at 2-3 (describing the current
definition of Non-Professional Subscriber as ``convoluted and
confusing'' and supporting the proposed classification of
subscribers based on how the data is used); Massive Letter at 1, 2
(stating there would be reduced compliance friction as a result of a
use-based distinction for professional and non-professional fees and
simplified definitions for direct and indirect access).
\53\ See supra Item II.B.
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A. Statutory Basis
Commenters discussed the statutory basis that the Operating
Committee used to support the Fee Proposal.\54\ Commenters raised
concerns as to whether the Fee Proposal is fair, reasonable, and not
unreasonably discriminatory.\55\ Commenters stated that the Fee
Proposal should be assessed against a cost-based standard.\56\ One
commenter stated that ``[o]n the current record, we believe the
Commission cannot find the Proposal consistent with the Exchange Act''
because the Fee Proposal does not contain any data about actual
costs.\57\ According to another commenter, a ``cost-based standard of
review will ensure that SIP data fees are reasonably related to the
expenses incurred to collect, consolidate, and disseminate SIP data,
while simultaneously allowing SROs to compete through proprietary
offerings such as top-of-book feeds'' and advance the goal of
``ensuring fair and reasonable access to SIP data.'' \58\ Another
commenter stated that ``[u]ntil the Commission approves a new standard,
the Commission's `reasonable relation to costs' standard for
determining whether consolidated market data fees are consistent with
the Exchange Act remains in place.'' \59\
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\54\ See SIFMA Letter II; Fidelity Letter; Massive Letter.
\55\ See SIFMA Letter II at 3; Fidelity Letter at 3-4; Massive
Letter at 11.
\56\ See Fidelity Letter at 2 and 4; Massive Letter at 11-12;
SIFMA Letter II at 3. One commenter stated that it provides its Non-
Professional retail customers widespread access to SIP data at no
direct cost to the customer, but at a substantial cost to itself.
Further, the commenter stated that ``[g]iven that SIP data is
derived from retail and institutional investor transactions, its
dissemination should advance the public interest rather than confer
economic benefit upon SROs.'' See Fidelity Letter at 1.
\57\ See SIFMA Letter II at 4.
\58\ See Fidelity Letter at 4.
\59\ See SIFMA Letter II at 4.
---------------------------------------------------------------------------
Commenters stated that comparing the proposed fees for SIP data to
those charged for proprietary, top-of-book feeds (``Prop Feeds'') is
not appropriate.\60\ Commenters stated that Prop Feeds are directly
provided by individual exchanges with varying content and therefore
inherently fragmented, costly and cater to niche data subscribers
rather than the broad market.\61\ One commenter further stated that
comparisons to delayed data or data from alternative feeds are also not
appropriate because such data fail to meet ``the requirements for
consolidated equity market data under the SEC's Vendor Display Rule.''
\62\ Another commenter stated that the use of Prop Feeds as a baseline
for justifying CT Plan fees ``demonstrates the conflict SROs face as
operators of the CT Plan'' and that there is no incentive to compete on
price or other factors to make SIP data more attractive, or as
attractive, as Prop Feeds.\63\ This commenter also stated that the
proposed fees were compared to the most expensive Prop Feeds and that
the pricing choice by the CT Plan demonstrates that the SROs do not
want to make SIP data competitive with Prop Feeds.\64\
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\60\ See Fidelity Letter at 4; SIFMA Letter II at 6-7.
\61\ See Fidelity Letter at 4; SIFMA Letter II at 6-7.
\62\ See Fidelity Letter at 4. See also 17 CFR 242.603(c). This
commenter urged a standard based on cost rather than comparability
to Prop Feeds or delayed data, asking the Commission to require the
SROs to make publicly available their costs associated with
collecting, consolidating and distributing SIP data. See Fidelity
Letter at 4; see also SIFMA Letter II at 7.
\63\ See SIFMA Letter II at 7.
\64\ See SIFMA Letter II at 8.
---------------------------------------------------------------------------
This commenter further stated that the Fee Proposal ``repackages
the fees charged by the existing Equity Data Plans under the banner of
the CT Plan to ensure that the SRO Members continue to receive the same
level of revenue'' and does not reflect ``cost savings associated with
`reducing the existing redundancies, inefficiencies, and
inconsistencies' of having three separate plans.'' \65\ The commenter
stated that ``[w]ithout cost information, not only are the proposed fee
levels unsupported, but it is not evident why there are three separate
Professional use fees for each of the individual Tapes.'' \66\
---------------------------------------------------------------------------
\65\ See SIFMA Letter II at 4.
\66\ See SIFMA Letter II at 4.
---------------------------------------------------------------------------
B. Proposed Professional and Non-Professional Use Definitions and Fees
Commenters favored the proposed use-based distinction for
Professional and Non-Professional Uses over the current practice of
looking to the registered status of the user on a platform such as
FINRA's BrokerCheck.\67\ One commenter stated that it ``strongly
supports the Proposed Fee Schedule's shift from status-based to use-
based definitions for distinguishing Professional and Non-Professional
subscribers,'' identifying it as an administrative burden that has long
plagued market data redistributors.\68\ Another commenter stated that
``the SEC should approve the Proposal's approach to classify SIP data
subscribers based on how they use SIP data, rather than their
employment status.'' \69\
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\67\ See Fidelity Letter at 2-3; Massive Letter at 1-2; SIFMA
Letter II at 2-3.
\68\ See Massive Letter at 2.
\69\ See Fidelity Letter at 3.
---------------------------------------------------------------------------
Commenters generally supported the proposed safe harbor.\70\ One
commenter stated that the ``safe harbor will further the CT Plan's
stated goal of reducing subscribers' administrative burdens and audit
risks.'' \71\ However, another commenter stated that the safe harbor
should be more explicit, objective and enforceable, such as specifying
that a Real-Time Redistributor will be deemed to have acted in good
faith, and therefore, not subject to audit liability based on
subscriber misclassification where it has implemented documented
onboarding procedures obtaining clear Professional and Non-Professional
Use attestations and including commercially reasonable screening
designed to detect obvious inconsistencies.\72\
---------------------------------------------------------------------------
\70\ See Fidelity Letter at 3; Massive Letter at 1-2, 7; SIFMA
Letter II at 2-3.
\71\ See SIFMA Letter II at 3.
\72\ See Massive Letter at 8. The commenter also recommended
that the Operating Committee make explicit that the safe harbor
applies equally to all forms of redistribution, including API-based
and non-display delivery so long as the redistributor controls the
entitlements and can obtain and track necessary subscriber
representations. See Massive Letter at 8.
---------------------------------------------------------------------------
One commenter suggested that the CT Plan should consider a
``platform-based approach'' to Non-Professional and Professional Use
designations such that ``if a substantial number of individuals use an
application or platform providing SIP data access for personal, non-
investment professional use, such as a retail brokerage platform, any
individual using the platform would default to Non-Professional
subscriber status.'' \73\ Another commenter suggested that the
Professional Use definition should turn on ``economic substance rather
than legal form'' and further, there should be a ``targeted exception
for single-member LLCs and other disregarded entities where the
beneficial owner is a natural person using CT Plan data solely for
personal purposes.'' \74\
---------------------------------------------------------------------------
\73\ See Fidelity Letter at 3.
\74\ See Massive Letter at 7.
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One commenter said that it was ``unclear how many customers
currently classified as Professional subscribers will shift to Non-
Professional subscriber status under the new usage
[[Page 17045]]
definitions.'' \75\ According to this commenter, if only a small
percentage transition, the commenter's ``real-time quote costs'' will
rise given the removal of Professional subscribers from the enterprise
cap.\76\ This commenter urged the Commission to consider whether the
proposed fees and enterprise cap levels can be lowered to a rate that
is still profitable to the CT Plan but improves the ability for firms
to make SIP data more broadly available.\77\
---------------------------------------------------------------------------
\75\ See Fidelity Letter at 5.
\76\ See Fidelity Letter at 4.
\77\ See Fidelity Letter at 5. The commenter also suggested
establishing enterprise caps at a level more competitive and in-line
with proprietary market data product enterprise cap levels, as well
as offering it at no cost when used to meet regulatory requirements.
See Fidelity Letter at 5.
---------------------------------------------------------------------------
One commenter expressed support for tangible efficiencies from
consolidating the Equity Data Plans' fee schedules into a single CT
Plan and cited as an example the reduction in fees for Non-Professional
Use (varying from $0.25-0.90) from the current, flat charge of $1.00
per non-professional subscriber.\78\ Commenters generally supported the
sliding scale as one of several changes reducing compliance friction
and promoting broad data availability.\79\
---------------------------------------------------------------------------
\78\ See Massive Letter at 4.
\79\ See Massive Letter at 2, 4.
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One commenter questioned why there are three separate Professional
Use fees for each of the individual tapes.\80\
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\80\ See SIFMA Letter II at 4.
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C. Proposed Enterprise Caps
While commenters appreciated the CT Plan retaining an enterprise
cap,\81\ they stated that the Commission should assess whether the
proposed fee and enterprise cap levels advance the goal of ensuring
fair and reasonable access to SIP data.\82\ One commenter that
supported the retention of an enterprise cap in the proposed fee
schedule stated that enterprise caps offer ``predictable costs for
consolidated quote and trade data, regardless of usage volume.'' \83\
---------------------------------------------------------------------------
\81\ See Fidelity Letter at 4; SIFMA Letter II at 2.
\82\ See Fidelity Letter at 4; SIFMA Letter II at 2, 9.
\83\ See Fidelity Letter at 4.
---------------------------------------------------------------------------
One commenter stated that the rationale for removing Professional
subscribers from the enterprise caps did not withstand scrutiny.\84\
This commenter stated that only firms with large numbers of Non-
Professional Users would realize any benefit from the enterprise
caps.\85\ Further, this commenter stated that the CT Plan should
consider lowering the enterprise caps so that a broader number of
subscribers would be able to provide SIP data to more investors.\86\ In
addition, the commenter stated that the Operating Committee's assertion
that capping Professional Use fees would not incentivize SIP data
dissemination demonstrates the ``significant conflicts of interest''
the SROs have with their dual role as the sole source of SIP data and
providers of Prop Feeds.\87\ This commenter further stated that the
Operating Committee should explain why it believes Prop Feeds are not a
``relevant comparison'' with respect to setting enterprise caps but
that such comparison is a ``helpful benchmark'' for other proposed
fees.\88\
---------------------------------------------------------------------------
\84\ See SIFMA Letter II at 9.
\85\ See SIFMA Letter II at 9.
\86\ See SIFMA Letter II at 10.
\87\ See SIFMA Letter II at 10.
\88\ See SIFMA Letter II at 10.
---------------------------------------------------------------------------
D. Proposed Redistributor Fees
One commenter generally supported not imposing fees for Delayed
Redistributor and End-of-Day Redistributor,\89\ and further suggested
such usage should be excluded from monthly reporting obligations and
audit scope.\90\ At the same time, the commenter questioned the use of
an inflation adjustment for certain Redistributor fees when ``[e]very
major technology sector has experienced cost deflation over the past
decade.'' \91\ This commenter requested actual cost data demonstrating
that the proposed fee increases are reasonably related to costs or be
disapproved.\92\
---------------------------------------------------------------------------
\89\ See Massive Letter at 5.
\90\ See Massive Letter at 5-6.
\91\ See Massive Letter at 11.
\92\ See Massive Letter at 12.
---------------------------------------------------------------------------
E. Proposed Non-Display and Derived Data Usage
One commenter requested clarification regarding the definition of
Non-Display Use, stating the definition should ``more clearly
distinguish instances where a broker engages in both proprietary
trading and facilitation of client orders in an agency capacity.'' \93\
Further, the commenter suggested that three separate categories of Non-
Display Use are no longer necessary given the fees across three
categories are the same.\94\
---------------------------------------------------------------------------
\93\ See SIFMA Letter II at 3.
\94\ See SIFMA Letter II at 3, n. 4.
---------------------------------------------------------------------------
One commenter questioned applying a 15.95% inflation adjustment to
Non-Display Use when ``[e]very major technology sector has experienced
cost deflation over the past decade.'' \95\ This commenter requested
actual cost data demonstrating that the proposed fee increases are
reasonably related to costs or be disapproved.\96\
---------------------------------------------------------------------------
\95\ See Massive Letter at 11.
\96\ See Massive Letter at 12.
---------------------------------------------------------------------------
One commenter stated that proposing to charge a Non-Display fee for
Derived Data Usage is inconsistent with the current Equity Data Plans
which ``recognize that when an end user transforms data for the purpose
of displaying it, that use should be treated as display use rather than
Non-Display Use.'' \97\ This commenter recommended the proposed fee
schedule expressly provide that Non-Display fees do not apply where an
end user creates Derived Data and uses it solely for display
purposes.\98\ According to this commenter, customers would be subject
to new fees of $10,990 per month.\99\ Further, this commenter
questioned charging Non-Display fees where the recipient makes use of
an API but ultimately displays the data on a screen.\100\
---------------------------------------------------------------------------
\97\ See Massive Letter at 9.
\98\ See Massive Letter at 10. This commenter also stated that a
``vendor paying applicable Non-Display fees for derived data
creation should be permitted to redistribute that derived data to
customers through any access channel without additional reporting
obligations, approval requirements, or customer-level fees.'' See
Massive Letter at 11.
\99\ See Massive Letter at 9.
\100\ See Massive Letter at 6.
---------------------------------------------------------------------------
F. Proposed Direct and Indirect Access
Commenters generally supported simplifying the Direct and Indirect
Access definitions.\101\ However, one commenter asked for
``confirmation that extranet connections will be appropriately
reclassified from Direct to Indirect Access under the new framework.''
\102\ Another commenter asked for clarification regarding the term
``data center,'' stating it is not clear whether it would include other
data centers that may be interconnected or if it would be confined to
the single physical structure where the Processer is located.\103\
---------------------------------------------------------------------------
\101\ See Massive Letter at 2; SIFMA Letter II at 3.
\102\ See Massive Letter at 4.
\103\ See SIFMA Letter II at 3.
---------------------------------------------------------------------------
G. Other Fees
One commenter generally supported the non-fee liable treatment of
Delayed Subscriber and End-of-Day Subscriber.\104\ However, the
commenter suggested that to the extent data is not fee liable,
redistributors should not be required to ``navigate the data feed
recipient approval process or submit usage reports.'' \105\
---------------------------------------------------------------------------
\104\ See Massive Letter at 2, 5.
\105\ See Massive Letter at 5.
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[[Page 17046]]
H. Other Comments
Commenters stated that Market Data Infrastructure (``MDI'') rules
\106\ should be considered.\107\ One commenter stated that without the
MDI proposed fees, a competitive environment for SIP data cannot
begin.\108\ Another commenter stated that the Commission should
consider whether the competing consolidator/self-aggregator model would
still introduce competition in the market for SIP data.\109\ The
commenter stated that if the CT Plan attempts to establish fees that
maintain current SRO revenues, competing consolidators will be unable
to compete in the market.\110\ Commenters stated that the Commission
should ``either set a date certain by which the Operating Committee
must propose a fee amendment for the sale of data to competing
consolidators and self-aggregators or chart a different path forward.''
\111\ One commenter stated that the Commission should consider
rescinding or modifying the Vendor Display Rule to give broker-dealers
more flexibility in the market information they display to their
customers.\112\
---------------------------------------------------------------------------
\106\ See Securities Exchange Act Release No. 90610 (Dec. 9,
2020), 86 FR 18596 (Apr. 9, 2021).
\107\ See Fidelity Letter at 6; SIFMA Letter II at 11.
\108\ See Fidelity Letter at 6.
\109\ See SIFMA Letter II at 11. See also Fidelity Letter at 6.
\110\ See SIFMA Letter II at 11.
\111\ See SIFMA Letter II at 11. See also Fidelity Letter at 6.
\112\ See SIFMA Letter II at 8, n. 16.
---------------------------------------------------------------------------
IV. Proceedings To Determine Whether To Approve or Disapprove the Fee
Proposal
The Commission is instituting proceedings pursuant to Rule
608(b)(2)(i) of Regulation NMS,\113\ and Rules 700 and 701 of the
Commission's Rules of Practice,\114\ to determine whether to approve or
disapprove the Fee Proposal, as modified by Amendment No. 1, or to
approve the Fee Proposal, as modified by Amendment No. 1, with any
changes or subject to any conditions the Commission deems necessary or
appropriate. The Commission is instituting proceedings to have
sufficient time to consider the issues raised by the Fee Proposal, as
modified by Amendment No. 1, including comments received. Institution
of proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved. Rather, the
Commission seeks and encourages interested persons to provide
additional comment on the Fee Proposal, as modified by Amendment No. 1,
to inform the Commission's analysis.
---------------------------------------------------------------------------
\113\ 17 CFR 242.608(b)(2)(i).
\114\ 17 CFR 201.700; 17 CFR 201.701.
---------------------------------------------------------------------------
Rule 608(b)(2) of Regulation NMS provides that the Commission
``shall approve a national market system plan or proposed amendment to
an effective national market system plan, with such changes or subject
to such conditions as the Commission may deem necessary or appropriate,
if it finds that such plan or amendment is necessary or appropriate in
the public interest, for the protection of investors and the
maintenance of fair and orderly markets, to remove impediments to, and
perfect the mechanisms of, a national market system, or otherwise in
furtherance of the purposes of the [Exchange] Act.'' \115\ Rule
608(b)(2) further provides that the Commission shall disapprove a
national market system plan or proposed amendment if it does not make
such a finding.\116\ In the Notice, the Commission sought comment on
the Fee Proposal, including whether the Fee Proposal is consistent with
the Exchange Act.\117\ In this order, pursuant to Rule 608(b)(2)(i) of
Regulation NMS,\118\ the Commission is providing notice of the grounds
for disapproval under consideration:
---------------------------------------------------------------------------
\115\ 17 CFR 242.608(b)(2).
\116\ Id.
\117\ See Notice, supra note 5, at 61478.
\118\ 17 CFR 242.608(b)(2)(i).
---------------------------------------------------------------------------
<bullet> Whether, consistent with Rule 608 of Regulation NMS, the
Fee Proposal, as modified by Amendment No. 1, is necessary or
appropriate in the public interest, for the protection of investors and
the maintenance of fair and orderly markets, to remove impediments to,
and perfect the mechanisms of, a national market system, or otherwise
in furtherance of the purposes of the Exchange Act; \119\
---------------------------------------------------------------------------
\119\ 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------
[[Page 17047]]
<bullet> Whether the Fee Proposal, as modified by Amendment No. 1,
is consistent with Section 11A(c)(1)(C) of the Exchange Act (as
implemented by Rule 603(a)(1) of Regulation NMS), which requires that
exclusive processors (which include the exclusive SIPs and SROs when
they distribute their own data) \120\ must assure that all securities
information processors may obtain on fair and reasonable terms
information with respect to quotations for and transactions in
securities, which includes SIP data; \121\
---------------------------------------------------------------------------
\120\ See 15 U.S.C. 78c(a)(22) (defining ``securities
information processor'' and ``exclusive processor'').
\121\ 15 U.S.C. 78k-1(c)(1)(C); 17 CFR 242.603(a)(1).
---------------------------------------------------------------------------
<bullet> Whether the Fee Proposal, as modified by Amendment No. 1,
is consistent with Section 11A(c)(1)(D) of the Exchange Act (as
implemented by Rule 603(a)(2) of Regulation NMS), which requires that
the SROs provide SIP data to broker-dealers and others on terms that
are not unreasonably discriminatory; \122\
---------------------------------------------------------------------------
\122\ 15 U.S.C. 78k-1(c)(1)(D); 17 CFR 242.603(a)(2).
---------------------------------------------------------------------------
<bullet> Whether modifications to the Fee Proposal, as modified by
Amendment No. 1, or conditions to its approval, such as a sunset
period, would be necessary or appropriate in the public interest, for
the protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the Exchange
Act.\123\
---------------------------------------------------------------------------
\123\ 17 CFR 242.608(b)(2); 15 U.S.C. 78k-1(c)(1)(D).
---------------------------------------------------------------------------
Under the Commission's Rules of Practice, the ``burden to
demonstrate that a NMS plan filing is consistent with the Exchange Act
and the rules and regulations issued thereunder . . . is on the plan
participants that filed the NMS plan filing.'' \124\ The description of
the NMS plan filing, its purpose and operation, its effect, and a legal
analysis of its consistency with applicable requirements must all be
sufficiently detailed and specific to support an affirmative Commission
finding.\125\ Any failure of the plan participants that filed the NMS
plan filing to provide such detail and specificity may result in the
Commission not having a sufficient basis to make an affirmative finding
that the NMS plan filing is consistent with the Exchange Act and the
applicable rules and regulations thereunder.\126\
---------------------------------------------------------------------------
\124\ 17 CFR 201.700(b)(3)(ii).
\125\ Id.
\126\ Id.
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V. Commission's Solicitation of Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the Fee Proposal, as modified by Amendment No. 1. In particular,
the Commission invites the written views of interested persons
concerning whether the Fee Proposal, as modified by Amendment No. 1, is
consistent with the Exchange Act, the rules and regulations
thereunder.\127\ The Commission asks that commenters address the
sufficiency and merit of the Operating Committee's statements in
support of the Fee Proposal, as modified by Amendment No. 1, in
addition to any other comments they may wish to submit about the Fee
Proposal, as modified by Amendment No. 1.
---------------------------------------------------------------------------
\127\ See 17 CFR 242.608(b)(2); 15 U.S.C. 78k-1(c)(1)(C)-(D); 17
CFR 242.603(a). See also CT Plan Approval Order at 94957 (stating
that fees will be assessed against statutory and regulatory
standards applicable to fees proposed by national market system
plans including Section 11A(c)(1)(D) of the Exchange Act and Rule
603(a) under Regulations NMS).
---------------------------------------------------------------------------
Although there do not appear to be any issues relevant to approval
or disapproval that would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 608(b)(2)(i) of Regulation NMS,\128\ any request for an
opportunity to make an oral presentation.\129\
---------------------------------------------------------------------------
\128\ 17 CFR 242.608(b)(2)(i).
\129\ Rule 700(c)(2) of the Commission's Rules of Practice
provides that ``[t]he Commission, in its sole discretion, may
determine whether any issues relevant to approval or disapproval
would be facilitated by the opportunity for an oral presentation of
views.'' 17 CFR 201.700(c)(2).
---------------------------------------------------------------------------
Interested persons are invited to submit written data, views, and
arguments regarding whether the Fee Proposal, as modified by Amendment
No. 1, should be approved or disapproved by April 24, 2026. Any person
who wishes to file a rebuttal to any other person's submission must
file that rebuttal by May 8, 2026. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#e391968f86ce808c8e8e868d9790a3908680cd848c95"><span class="__cf_email__" data-cfemail="3a484f565f17595557575f544e497a495f59145d554c">[email protected]</span></a>. Please include
file number 4-757 (CT Plan Fee Proposal) on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number 4-757 (CT Plan Fee
Proposal). This file number should be included on the subject line if
email is used. To help the Commission process and review your comments
more efficiently, please use only one method. The Commission will post
all comments on the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection
and copying at the Operating Committee's principal offices. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to File Number 4-757 (CT Plan Fee Proposal)
and should be submitted on or before April 24, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\130\
---------------------------------------------------------------------------
\130\ 17 CFR 200.30-3(a)(85).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
EXHIBIT A
Cumulative Proposed Revisions to CT Plan
BILLING CODE 8011-01-P
[[Page 17048]]
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[[Page 17049]]
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[[Page 17050]]
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[GRAPHIC] [TIFF OMITTED] TN03AP26.004
[FR Doc. 2026-06463 Filed 4-2-26; 8:45 am]
BILLING CODE 8011-01-C
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