In market structure, Securities and Exchange Commission

For Immediate Release
August 8, 2022


Leading Consumer and Investor Advocates Urge SEC to Review SRO Exchange Fee Filing Rules


Rules Enable Exchanges to Immediately Inflate Fees for Market Data Without Justification


WASHINGTON, D.C. (August 8, 2022) — A broad coalition of leading consumer and investor advocates has urged the U.S. Securities and Exchange Commission (SEC) to revise its self-regulatory organization (SRO) rule and fee change filing processes regarding national securities exchanges to ensure that fee filings comply with the Securities Exchange Act of 1934 and Commission rules to better protect investors and other market participants.

“In the absence of clear SEC rules or evaluation procedures put in place by the SEC, and in the absence of competition, exchanges fees have increased at rates that bear little relationship to reality,” the coalition wrote in an August 5 letter to SEC Chairman Gary Gensler, noting that an industry study found fees to receive market data from certain exchanges have increased by 1,100% in recent years.

“Exchange fees matter to investors because they directly affect order routing decisions and the ability of broker-dealers to achieve best execution for their customers,” the coalition wrote. “Market participants shouldn’t have to continue to endure existing exchange rules that violate the law. The investing public should be given a voice in how and when these changes go into effect.”

National securities exchanges (NSEs) are required by law to file changes to their rules and fees with the SEC. The SEC, in turn, is obligated to review exchange filings and determine that those filings are consistent with the law.

The coalition cited the SEC’s “continuing failure to meaningfully review or analyze” SRO exchange rule and fee change filings at a time when exchanges have increasingly flouted and even abused “effective on filing” privileges to inflate fees for market data and connectivity, often without any basis or justification. For “effective upon filing” rules changes, the public is typically not provided a formal notice or the opportunity to review and potentially challenge a rule or fee in advance of implementation. In 2021, of the 1,338 SRO filings made with the SEC, approximately 570 were “effective on filing,” including approximately 200 related to market data fees.

The coalition called upon the SEC to rescind the “effective upon filing” status for SRO fee filings to assure SRO rule changes do not become effective until, after the SEC has affirmatively determined that such fees, as required by law, are reasonable, equitably allocated, not unduly burdensome on competition, and not discriminatory.

The coalition also urged the SEC to revise its rules for NSE rule change filings to provide market participants and the public an opportunity to review or challenge filings prior to effectiveness; and improve disclosures of SRO fee filings to help market participants and the Commission ensure that brokers are fulfilling their best execution obligations.

“We believe that it is plainly in the interest of market participants and above all the investing public to provide a reasonable time for review of these filings, before they become effective, so that all stakeholders can understand their potential impact on products, pricing, investors, and technology,” the coalition wrote.

Signatories to the letter include the following organizations: Americans for Financial Reform Education Fund, Better Markets, Consumer Federation of America, Healthy Markets Association, Public Citizen, and 20/20 Vision. A full copy of the letter is included below.

The complete text of the letter is accessible here: coalition-letter-to-sec-chair-re-sro-effective-on-filing-rules-and-fees-august-8-2022-final-in-pdf

For More Information:


Chris Nagy, Research Director, Healthy Markets Association

(402) 312-7918,


Michael Canning, Principal, LXR Group

(202) 803-0170,

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