Analysis: Court ruling may offer new path in market-data fee dispute

Fri May 3, 2013 12:40pm EDT
 
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By Herbert Lash

NEW YORK (Reuters) - At first blush the two leading U.S. stock exchanges won a sweeping victory this week in a long-running legal battle over market data - the stock quotes, share prices and other trading information that are highly prized in the electronic marketplace.

But a ruling by the U.S. Appeals Court for the District of Columbia Circuit may also have opened the door for the Internet companies, brokers and others in the case to achieve a decade-old goal of cutting the fees the exchanges charge for the data.

The court ruled in a decision earlier this week it had no jurisdiction over a case brought by the NetCoalition of some 20 Internet companies, including Google Inc and Yahoo Inc, and the Securities Industry and Finance Markets Association, a 600-member lobby for brokers, bankers and asset managers.

The decision appeared to slam the door on the petitioners and remove a potential obstacle to efforts by the New York Stock Exchange and the Nasdaq Stock Market to offset sharp drops in revenue from stock transactions by boosting market data sales.

But the court did offer a path for Sifma and the NetCoalition group to mount a new battle, several people close to the case said.

The court indicated the Securities Exchange Act, which governs exchanges and their responsibilities as self-regulatory organizations, requires that the exchanges provide for the "equitable allocation" of reasonable fees, among other dues and charges.

The petitioners have argued the exchanges are effectively monopolies and competition is not sufficient to restrain prices.

"I intend to submit a ... petition," said Roger Blanc, a lawyer with Willkie Farr who represented the NetCoalition, the name by which the case is also called. "As soon as we can put it together, we'll be back before the circuit court."   Continued...

 
Traders work on the floor at the New York Stock Exchange, May 3, 2013. REUTERS/Brendan McDermid