With the debate around the costs of data in EU equity trading markets ongoing, FESE has commissioned Oxera to undertake an analysis on the evolution of market data fees and revenues since MiFID II. This study builds on similar analysis Oxera conducted in 2019 and 2022.
The note is particularly relevant in the current debate as it is published in the context of ESMA’s consultation on the RTS on Reasonable Commercial Basis, which closed at the end of August (see our response here).
Oxera’s analysis shows, inter alia, that:
- Market data revenues from stock exchanges have remained relatively stable over recent years;
- This is consistent with the overall price of market data not having increased much overall. The note also considers the trends for different types of fees for display, non-display and redistribution licenses.
- When considering the wider value chain, the cost of exchange data for end-investors is relatively small.
In our view, the findings show that exchange market data pricing has remained reasonable, when considering the evolution of revenues and fees. The use of display data has decreased, while that of non-display data has increased, leading to a rebalancing of fees to reflect this shift. Additionally, fees have been adjusted to allow smaller clients to pay less. This is also happening in a context where costs have risen significantly in recent years due to a variety of factors such as increased regulation, general inflationary pressures, and the competition for talent. Exchange market data revenues have remained relatively stable and continue to represent only a small portion of the overall market data spend in the industry.
We encourage ESMA to consider the findings of this note in their work on the RTS on RCB, along with our response to the recent consultation. In the latter, we elaborate on the potential consequences of overregulation, including but not limited to a potential overreliance on the cost base alone to calculate the fees, and provide targeted suggestions to help shape the upcoming RTS effectively.
