Wall Street Data Pricing Under Scrutiny by Trump Antitrust Chief

Makan Delrahim Photographer: Patrick T. Fallon/Bloomberg Photographer: Patrick T. Fallon/Bloomberg Wall Street banks that have long griped about the power of trading venues to charge high prices for data feeds may have a new ally: Donald Trump’s chief competition watchdog. Makan Delrahim, who heads the Justice Department’s antitrust division, said […]

Makan Delrahim

Photographer: Patrick T. Fallon/Bloomberg

Wall Street banks that have long griped about the power of trading venues to charge high prices for data feeds may have a new ally: Donald Trump’s chief competition watchdog.

Makan Delrahim, who heads the Justice Department’s antitrust division, said in an interview that he’s paying close attention to the data that securities exchanges sell to banks and investment companies. Market participants have long complained that the prices they pay to acquire the data they depend on to trade are too steep.

“I wanted to make sure that if there was anticompetitive conduct on Wall Street that we pursue it,” Delrahim said about a recent cooperation agreement with the Securities and Exchange Commission. “We don’t take a side seat and say this is an area where we don’t enforce the antitrust laws.”

The focus on exchange data is part of a broader effort by Delrahim to recast the antitrust division’s approach to financial services. He is also considering revamping the U.S.’s view of bank mergers. He’s even reorganizing his staff to devote a team exclusively to financial services with the goal of building expertise in new technology that’s competing with traditional players in the sector.

Delrahim said that one area of potential concern is whether the exchanges are using market power to hurt competition, for example by forcing investors to buy other products or services in addition to the data feeds, a practice known as tying. He declined to comment on whether the division has opened a formal investigation related to the data feeds.

Delrahim’s comments are the latest example of Trump officials threatening to crack down on how the New York Stock Exchange, Nasdaq Inc. and Cboe Global Markets Inc. charge for market data, the lifeblood of modern trading.

Exchange stocks tumbled Tuesday on the news. Nasdaq closed down 3.2%, Cboe fell 2.4% and Intercontinental Exchange Inc. declined 2%. CME Group Inc. fell 1.7%.

NYSE declined to comment. Cboe said in a e-mailed statement that market data fees already face a “uniquely rigorous” review process by the SEC and that “competition between the market data offerings of U.S. securities exchanges is incredibly robust.” Nasdaq didn’t immediately respond to an e-mailed request for comment.

The SEC under Jay Clayton has clashed particularly with Intercontinental Exchange, which owns the NYSE, and Nasdaq over how they provide market data that banks and investment firms use. The SEC requires the venues to make the information widely available through so-called core feeds. But Wall Street banks and other financial firms say those streams are woefully insufficient for the realities of modern trading.

For more: Stock Market Wars in U.S. Pit Everyone Against Everyone Else

In the world of lightning-fast transactions where any data advantage can be significant, the exchanges offer private feeds with more detailed information beyond the price, size, highest bid or lowest offer information widely available on the core feeds. Some market participants say they’re forced to pay the exchanges a premium for more comprehensive, proprietary data just to serve their clients.

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