SIP Revenues Contract Slightly over the Past Decade

Amidst the controversy surrounding U.S. exchange equity market data pricing, U.S. Exchange SIP revenues have remained remarkably stable over the past decade. SIP revenues for U.S. Securities Exchanges totaled $389.4 million in 2019, off just 0.01% from 2018 levels, and representing a -0.1% CAGR since 2010.

The Evolution of the SIP

Changes to the SIP appear likely in the future as the SEC, a coalition of capital market participants and the SIP Operating Committees themselves have recently proposed initiatives to modernize the national market system, increase the types of information disseminated and provide increased transparency into the operations of the SIP committees.

  • A coalition of capital market participants petitioned the SEC on September 17, 2019, as part of their efforts to require the SIP operators to disclose more granular information on revenues, costs and investments associated with the dissemination of the consolidated tape by the securities information processors (SIP).
  • On October 2, 2019, The SIP Operating Committees announced that they issued a proposal for adding Odd Lot quotes to the UPT and CTA/CQ data feeds, giving the public and the industry a 45-day window to comment on the proposal.
  • On January 8, 2020, the SEC published for comment a proposed order to change the governance of the SIPs to a single NMS plan.
  • On February 14, 2020, the SEC announced a proposal to update and expand the content of NMS market data to include new round lot definitions and certain depth of book data.

Quarterly Review of SIP Revenue for U.S. Securities Exchanges 2019

Burton-Taylor possesses deep insight into Exchange Industry and is uniquely positioned to track the evolution of the SIP Operating Committees. We recently published our Quarterly Review of SIP Revenue for U.S. Securities Exchange 2019 which analyzes annual quote and trade revenue, and messaging data for Tape A, Tape B and Tape C equity securities. The report also provides historical annual revenue and messaging totals for the 2010 to 2019 period, as well as an analysis of each exchange holding company’s activity over the same time period.

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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