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Regulation

IEX backs SEC in market data fee justification case

Updated with correction

Exchange operator IEX Group filed an amicus brief Monday supporting SEC efforts to have other exchanges provide more justification for their market data fees.

IEX said in its amicus brief that recent stock market changes "have freed exchanges from significant competitive constraints on pricing for market feed data," and its experience "is consistent with the Commission's finding that evidence of significant price-constraining market forces is lacking."

SEC commissioners on Oct. 16 unanimously upheld a challenge from the Securities Industry and Financial Markets Association to fee increases for "depth-of-book" market data filed by Nasdaq and NYSE Arca. The SEC also remanded more than 400 market data fee and other filings for the exchanges to revisit under the standards cited in the order.

At the time, SEC Chairman Jay Clayton cautioned that the ruling does not mean the fees in question were too high, only that the exchanges so far have not provided sufficient factual and legal support to continue to charge those fees. But Mr. Clayton did note that, given technological and other changes in markets, taking a harder line protects both markets and Main Street investors.

The exchanges immediately appealed the SEC actions in a case now before the U.S. Court of Appeals for the District of Columbia. The same court has also ruled that the SEC has an obligation to do its own analysis.

Oral arguments in the case have not been scheduled.