NYSE Euronext is working with the U.S. Securities and Exchange Commission to address compliance with a rule prohibiting markets from disseminating information to subscribers faster than it is sent to organizations that provide the data publicly.
NYSE Euronext and the SEC are resolving possible violations of “a technical rule governing the timing of delivery of certain exchange market data,” Richard Adamonis, a spokesman, said in an e-mail. “The company does not expect that any settlement of this matter will be material.”
U.S. securities exchanges aren’t allowed to release data about trades and their best bids and offers to clients faster than they send it to the organizations that collect and disseminate it publicly. Exchanges earn money from the sale of subscriptions to proprietary and public data feeds, or streams of information.
Proprietary market data from an exchange enables clients to get transaction-related information faster than the public since the content doesn’t have to be collected from all venues and aggregated. The data also includes information that’s not public, such as the number of shares available at different prices. Data vendors such as Bloomberg LP, the parent of Bloomberg News, and Thomson Reuters Corp. pay the information processors a fee for data and charge their own customers. Exchanges share the revenue they receive collectively.
Rule 603(a) of Regulation NMS prohibits releasing information faster through a proprietary data feed.
NYSE Euronext received $193 million for the sale of cash equities market data last year, according to a regulatory filing. That segment includes the sale of public data in the U.S. and some of the data revenue generated in Europe.
Reuters, which reported the news earlier, said a settlement is probably a few months away.