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Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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February 1, 2004

Bloomberg's SEC Support on LiquidityQuote

By Gregory Bresiger

Score one for Bloomberg in its LiquidityQuote data cause celebre with the Big Board.

The Securities and Exchange Commission has ruled that Bloomberg was right when it held that it had the power to present the NYSE's LiquidityQuote data.

The Investor

A Bloomberg spokeswoman said the market data giant applauds the SEC's decision. She said it was the correct thing to do and ultimately "it will benefit investors tremendously."

The SEC's decision is another twist in a nasty row between Bloomberg and the New York Stock Exchange, which has been trying to curb the dissemination of its critical LiquidityQuote data.

At issue, is how Bloomberg gathers and repackages this information, information which clearly has economic value.

Among other things, the NYSE required vendors both to obtain the exchange's prior agreement for each proposed display of LiquidityQuote information. It also stipulated that vendors must have prior approval for all display changes.

The SEC said the NYSE's action was in breach of regulations.

The SEC held that Section 19(f) of the Exchange Act "requires that we set aside self-regulatory organization action if it imposes any burden on competition not necessary or appropriate in furtherance of the purposes' of the Exchange Act. We have determined that the NYSE's action was not taken in accordance with the Exchange's rules and, therefore, should be set aside under Section 19(f)."