SIFMA Calls on SEC to Reject Proposed Exchange Fees

SIFMA commented on proposed exchange rules that would provide information and establish fees for various trading and execution services, and for connectivity to market data feeds. SIFMA argued that the proposed rules exhibit a “lack of competitive forces and no restraint on pricing,” and that the proposed fees would constitute a denial of access.

SIFMA urged the SEC to reject the proposed rules by contending that they are in violation of the Securities Exchange Act of 1934, which requires national securities exchange rules not to “impose any burden on competition not necessary or appropriate in furtherance of the purposes of [the Exchange Act],” and obligates them to:

  • “provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities”; and
  • be designed to “perfect the operation of a free and open market and a national market system,” to “protect investors and the public interest,” and not to “permit unfair discrimination between customers, issuers, brokers, or dealers.”

Lofchie Comment: Broker-dealers and exchanges are locked in a perpetual battle over the fees that exchanges are permitted to impose.