Speaking at the U.S. Securities and Exchange Commission roundtable on Market Data and Market Access, TABB Group founder and research chairman Larry Tabb pinpointed how the market data fight is not about retail investors. Stressing how difficult it is to truly make sense of exchange market data revenues, he said the real battle is between institutions clashing over the cost of direct feeds, colocation, access and connectivity.
From his presentation:
"Thank you, Commissioners, Director Redfearn and commission staff. I am Larry Tabb, founder and research chairman of TABB Group, a financial markets research and advisory firm.
Market data revenue issues are very real and you have a very difficult job ahead of you. Somewhat like Solomon, having to determine how to split the market data baby.
I have supplied a number of charts on exchange market data revenues and my thoughts around market data. I won’t go into them all, however, there are some takeaways that I would like to discuss. First, please don’t use these numbers as gospel. They come from deep in the bowels of the exchanges’ 10ks, 10qs, and BATS’s S1. While this data is public, it is very difficult to make sense of the data given the many acquisitions, reporting structures, and different methods of splitting up their business lines, asset classes and geographies.
(Here are) my takeaways."
