SIP Revenue Exceeds $200 Million in First Half of 2020; New Equity Exchanges to Impact SIP Revenue Shares

U.S. equity exchanges earned $208.3 million in SIP shared revenue in the first half of 2020, an increase of 6.5% from the $195.7 collected in the same period last year.  After remaining relatively stable over the past decade, SIP revenue is on pace to eclipse the $400 million mark for the first time since 2009.

The increase in first half SIP totals was primarily driven by increased revenues associated with the rising numbers of retail investors entering equity markets this year.  The SIP data for “Capped Non-Professional Subscribers[1]” – the segment that captures retail investor accounts – saw sharp gains in both the first and second quarters of 2020, with the segment seeing a 63.0% increase in subscribers since the end of 2019.

Coming Soon to the SIP: New Equity Exchanges

 The recent and pending launches of 3 new equity exchanges are set to shake up the equity industry both in terms of market structure and distribution of SIP revenues.  The Long Term Stock Exchange began trading earlier this month, MEMX is set to launch on September 21st and MIAX PEARL Equities will launch on September 25th.   The impact on total SIP revenues will be minimal, as trading will initially shift between new and existing venues.  But over time as the new exchanges gain market share, SIP revenue will be redistributed from incumbent exchanges to the new exchanges since the SIP revenue allocation model takes into account volume and quoting activity.

[1] Capped Nonprofessionals includes data usage by those defined pursuant to the Nonprofessional Subscriber policy paying the flat per Subscriber rate. Includes Nonprofessionals paying on a per-quote basis that are capped at $1.00/month.


David Tabaka is an Analyst at Burton-Taylor International Consulting, part of TP ICAP group, where he is responsible for research, analysis and report generation covering Exchange Operators and Index Providers.

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