Institute Comments on SEC Concept Release Regarding Market Information

Washington, DC, April 4, 2000 - The Institute has filed a comment letter with the Securities and Exchange Commission on the Commission's concept release regarding the regulation of market information fees and revenues.

The Institute believes that the issues raised by the concept release are very important to the effective functioning of the markets. Reliable and timely market information is an important means of enhancing the transparency of the buying and selling interest in a security, for addressing the fragmentation of buying and selling interest among different market centers, and for facilitating the best execution of customers' orders by their broker-dealers.

The concept release states that one of the developments in the securities industry prompting the SEC review of market information arrangements is the NYSE and Nasdaq plans to become for-profit entities. The Institute believes the demutualization of the NYSE and Nasdaq raises a concern, which stems from the overwhelming dominance these entities are likely to continue to enjoy after they become for-profit enterprises, that the NYSE and Nasdaq might raise their fees to inappropriate levels. The Institute supports the SEC reevaluating the arrangements for disseminating market information, including the fees charged. The Institute agrees with the approach outlined in the concept release that market information fee levels should be tied to some type of flexible cost-based standard to prevent entities from raising fees to inappropriate levels and realizing excessive profits.