The CSA today released a consultation paper that considers real-time market data fees in Canada and seeks input on addressing the issues identified by the regulators. The paper specifically discusses three main concerns raised by marketplace participants and data consumers, namely that: (i) market data fees are too high; (ii) high fees are a result of participants being part of a "captive market"; and (iii) the process surrounding fee proposals and changes to fee models should be more transparent.
Ultimately, the paper concludes that while TSX and TSX-V market data fees do not appear unreasonable, marketplaces with smaller market shares are charging fees that are high in relation to their share of trading activity. Meanwhile, the paper suggests that the data fees charged by marketplaces in Canada and the U.S. should ideally be closer. The CSA, however, recognize that such an outcome may be unrealistic considering the differences in regulatory environment, industry structure, scale and size of the two markets.
Potential options considered by the paper include capping fees for "core data", capping fees for data sold through an information processor, regulating consolidated market data fees charged by the information processor, capping consolidated data fees sold by marketplaces to all data vendors, mandating a data ultility to operate on a cost-recovery basis, and requiring marketplaces to publish for comment any amendments to market data fee schedules.
The consultation paper also sets out a number of specific questions for stakeholders to consider, and comments are being accepted until February 8, 2013. For more information, see CSA Staff Consultation Paper 21-401.