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August 31, 2000

Market Data Fees Under Scrutiny

By William Hoffman

Fees for access to market information are likely to be a major theme of discussion at the Securities and Exchange Commission's newly established Advisory Committee on Market Information, the committee's chairman told Traders Magazine.

"There are no limits" on the subjects or scope of the new committee's investigations, said the chairman, Joel Seligman, dean of Washington University School of Law, in St. Louis, Mo.

"But I think it's premature to know what will come out of it," he added.

At press time, he noted that the other committee members, around 25, had not yet been named.

Seligman said he expects one hotly contested issue will be whether fees should be structured like those charged by a public utility, or be more open to market forces.

The SEC announced the new committee in July, in part to address issues raised by the commission's December 1999 concept release on market information fees and revenues. The commission received about 30 public comment letters in response, many concerned with the appropriate level of fees.

The committee will also explore the value of transparency to markets, and the impact of electronic quote generation and decimalization on that transparency. Other subjects will include alternative models for disseminating information to multiple markets, and how fees for that information should be determined.

The committee will include broker dealers, market makers, and the general public. The committee is expected to report to the commission by Sept. 15, 2001.

Seligman said he didn't know why SEC Chairman Arthur Levitt selected him for the job, except, "I don't know any ox to gore." Seligman has published standard-setting reference works on market regulation over the last 20 years.