Commentary

John Turney
Traders Magazine Online News

Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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June 6, 2006

The Big Board's OpenBook Finally Wins SEC Approval

By Peter Chapman

The New York Stock Exchange, following a two-year battle with market data vendors and others, finally received approval to launch its real-time OpenBook market data feed.

The Big Board got the nod from the Securities and Exchange Commission after backing off from the original contract demands it placed on data vendors. Bloomberg, in particular, fought to force the NYSE to change the terms of its distribution contract.

"The NYSE has decided to allow market data vendors to provide the integrated screens that commenters state end- users desire," the SEC noted in its approval order.

OpenBook "should allow market data vendors to provide their subscribers with useful data without imposing unnecessary restrictions," the SEC added.

OpenBook-effectively a list of bids and offers posted on specialists' books- has been available on a time-delayed basis since 2001. Quotes are updated every five seconds. Starting this month, quotes and trades will be broadcast in "real time," or as they occur.

The original OpenBook contracts prohibited market data vendors from commingling the NYSE quotes with those of other market data centers. Vendors and brokers complained to the SEC that the policy was anticompetitive. The SEC agreed but the issue was never front burner. There was little demand for the New York's time-delayed quotes.

In order to win approval for its real-time service though, a key feature of the New York's hybrid market offering, the Big Board bowed to critics. Vendors can now integrate OpenBook quotes with those of other market centers on their market data screens.