New York Stock Exchange Proposes To Simplify Market Data Fees; Per-Location Charge Would Be Dropped

The New York Stock Exchange plans to dramatically simplify the fee schedule it uses to charge professionals for market data. The proposed schedule would eliminate some charges and consolidate others, leaving users with a flat per-terminal charge. Tom Haley, vice president, market data services, at the NYSE, will present the plan at the Thursday morning general session of the SIA show.

Haley declines to discuss details of the new plan, which has been unanimously endorsed "in concept" by the SIA Communications Committee. Several sources who have been briefed, however, say its basic points are these:

(1) It is revenue-neutral. The NYSE will get neither more nor less market data revenue as a result.

(2) It does away with the per-location charge by increasing slightly the per-device charge.

(3) It eliminates the cost differential between last sale only and last sale plus bid/ask prices. Last sale only will no longer be an option.

(4) It eliminates the charge for the low-speed ticker.

As a result, sources say, most firms will wind up paying about the same exchange fees as they do today, but at a considerable savings in administrative effort. No longer will it be necessary to track services on a tube-by-tube basis.

A minority of firms will win a little or lose a little as a result. Those with immense branches -- like Merrill Lynch -- will end up paying more because of the incremental per-device charge. Those with many small branches -- like Edward D. Jones -- will end up paying less because the per-location charge will be dropped. In addition, those firms that try to save money by restricting some terminals to last sale will have to pay up.

Haley does confirm the general outline of the plan: "If a brokerage firm has 50 devices, in one scenario all in one branch and in another scenario spread around in five branches, they're paying different effective rates today because of the location charge. In the future they will all be paying the same amount."