Bloomberg Tradebook officials said the SEC should reject Nasdaq's exchange application. That's because allowing Nasdaq to use NASD's proposed trade reporting facility (TRF) and giving it access to OATS (Order Audit Trail Systems) trading data for non-regulatory purposes would be wrong, according to Kim Bang, an executive with Bloomberg Tradebook.
"It also would be improper to permit Nasdaq to use OATS data for non-regulatory purposes, Bang wrote. "The OATS and TRF data regarding off-exchange trading would confer significant and unique commercial benefits on Nasdaq, benefits that would not help investors."
Bang cautioned that the greatest benefit of the exchange application would give Nasdaq an inside and possibly exclusive track to extract additional market-data revenue. This would mean a continuation of the data revenue Nasdaq currently derives from trades reported to ACT (Automated Confirmation Transaction). Bang also contended that the sharing of trade data raises questions of whether Nasdaq will actually be independent of the NASD. Nasdaq declined comment.
