NYFE Move To CEC Trading Floor Results In Ticker Merger; Combined Market Data Fee Structure In Works

The New York Futures Exchange quote feed is slated to go out of existence as an independent entity by the end of the year. Under a last-minute agreement clearing the NYFE's February 8th move into New York's Commodity Exchange Center, the NYFE consented to merge its data feed into the CEC ticker, where it will eventually lose its identity.

"Probably in a few months you'll see NYFE disappear," says James Neal, CEC general manager. "They will be folded into the CEC network and become just another commodity on the CEC line." Sources indicate that the fate of NYFE's market data service was a point of contention between NYFE and CEC directors right down to the wire.

Neal sees three stages in the integration of NYFE data with CEC data. "What's going to happen initially is that NYFE will continue to run their own ticker through SIAC, but that's only going to last about a week to two weeks," he says. "Then they will be merged into the CEC ticker." During both of these stages, NYFE data customers will continue to pay NYFE fees as they currently do, and only those customers who pay the separate fee will see NYFE data.

In a few months, however, the separate NYFE market data fee will be discontinued and replaced by an incremental price increase for all CEC data customers, says Neal. At that point all CEC users will get NYFE data, and any NYFE customers who don't get CEC data will have to do so. It was on this issue, apparently, that talks got stuck until the eleventh hour.

According to sources, NYFE officials wanted to keep NYFE market data arrangements more or less status quo, using the CEC line as no more than a delivery vehicle. CEC directors, however, frowned on special treatment for NYFE, and were especially worried about setting a precedent by unbundling a component of the CEC feed, which comprises market data from four commodity exchanges. Next thing you know, they apparently thought, energy traders will demand an unbundled feed for Nymex data and metals traders will want the same thing for the Comex.

Where this leaves the NYFE's small but successful market data operation isn't clear. Data fees have been generating millions of dollars in revenue for the exchange. NYFE market data chief Roy Fairchild couldn't be reached.

The size of the incremental fee increase hasn't been set, says Neal, but it will be less than the current unbundled NYFE fee. "It'll go up something but it certainly won't go up that increment," he says. "We'd price ourselves out of the market if we did that."