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Nasdaq, NYSE Get Court Win on 2018 SEC Ruling in Data-Fee Battle

June 5, 2020, 5:13 PM

Nasdaq Inc. and the New York Stock Exchange won an appeals court ruling forcing the U.S. Securities and Exchange Commission to reconsider its 2018 finding that stock exchanges had failed to justify fee increases for market data.

The U.S. Court of Appeals in Washington on Friday denied the regulator’s motion to toss out a petition for review of the 2018 determination, ruling that an out-of-court process would leave exchanges at risk of financial harm that couldn’t be reversed if they ultimately prevailed.

“So it is now or never for judicial review,” a three-judge panel said in the ruling.

The fees the SEC rejected in 2018 included details such as the best available bids and offers for stock trades. In a separate decision at the time, the regulator sent back to the exchanges another 400 fee increases that were contested by the Securities Industry and Financial Markets Association and Bloomberg LP, the parent company of Bloomberg News.

The decision is a significant legal win for the stock exchanges in their ongoing fight with the SEC over how the companies charge for data that is the lifeblood of modern trading. The agency has taken several steps under Chairman Jay Clayton to more closely regulate how NYSE and Nasdaq distribute the information.

The proprietary data sets like the ones involved in Friday’s decision are an important source of revenue for the exchanges, accounting for hundreds of millions of dollars annually. Last month, in a separate but related move, the SEC directed exchanges to revamp the management of public data feeds that include more basic types of trading information.

Spokespeople for the SEC, NYSE, Nasdaq and Sifma didn’t immediately respond to e-mailed messages seeking comment.

To contact the reporters on this story:
Erik Larson in New York at;
Ben Bain in Washington at

To contact the editors responsible for this story:
Jesse Westbrook at;
David Glovin at

Gregory Mott

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