SEC Directs Equity Exchanges and Finra to Improve Governance of Market Data Plans
An SEC order directed stock exchanges and Finra to submit a new consolidated market data plan and modernized governance structure for the system that facilitates the distribution of equity and trade data to the markets. The National Market System plan comprises consolidated public data feeds that are distributed pursuant to three Equity Data Plans approved by the SEC between the 1970s-90s, which are jointly operated by the equities exchanges and Finra. “Today's action reflects careful analysis and deliberation on modernizing and improving access to equity market data and, as a result, our equity market structure more generally,” said SEC Chairman Jay Clayton. On previous occasions Clayton has expressed the necessity for change in the current two-tiered market data access system, noting the introduction and widespread use of proprietary data products into the market over the last decade. “Many of these data products are sold directly to certain market participants by most of the same self-regulatory organizations that govern the NMS plans,” Clayton said in a statement. The SEC said its order addresses conflicts of interest inherent in the current governance structure of the existing equity data plans and is designed to improve the efficiency of NMS plan operations and the responsiveness of the plan to the concerns of a broader range of market participants. Commissioners Elad Roisman and Hester Peirce supported the SEC’s order. Peirce expressed support for the requirement that market participants consolidate the three data plans into a single new plan, saying the single system “should make distributing market data more efficient, eliminate duplicative costs, and streamline compliance and oversight.” She added that those moves along with adding more voices to the governance structure should help increase transparency and accountability to the market as a whole.