Access to Stock Market Data – Transparent, Detailed, and Timely Data is King

The SEC has recently focused its attention on transparency regarding all aspects of the capital markets. This is seen by many as an attempt to ensure that Main Street investors have detailed and timely information necessary to make informed investment decisions. One area that has come under review is how, when, and at what cost do investors have access to market data. Under the SEC’s Regulation National Market System, exchanges such as the NYSE and Nasdaq must make their “best bids and offers” data available to Securities Information Processors (SIPs).[1] This data is seen as crucial to inform investors on the status of the market. The SIPs are coincidentally also managed by the exchanges to ensure that this vital data is made public in a non-discriminatory manner and at a reasonable cost. However, in addition to this quasi-public data, the exchanges offer more detailed data on limit orders at prices below “best bids and offers,” which is extremely valuable in getting a full assessment of the securities market. This more detailed, valuable, and arguably necessary data is considered proprietary and as such is offered at a premium. However, even though this more detailed data is considered proprietary, the fees assessed…