🇺🇸United States

Complex fee and licensing structures driving billing disputes and rework

2 verified sources

Definition

European research finds that exchanges have introduced "arbitrary and complex fee structures" based on user type, professional vs. retail, data consumption method, and device counts, with restrictive clauses on data use.[3] This complexity triggers frequent misclassification, misbilling, and client disputes, leading to internal rework, credit notes, and legal review on both exchange and client sides.

Key Findings

  • Financial Impact: Six‑figure annual internal cost for larger exchanges and major clients due to staff time on corrections, disputes, and legal review; foregone collections or write‑offs from disputed invoices can add further losses.[3][6]
  • Frequency: Monthly (billing cycles and ongoing license reporting corrections)
  • Root Cause: Highly granular, non‑standardized pricing grids, multiple user classes, and restrictive contract language that are hard for clients to interpret and for exchanges to enforce consistently, especially where usage is not automatically metered.[3][6]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Securities and Commodity Exchanges.

Affected Stakeholders

Exchange billing and revenue assurance teams, Market data licensing and compliance staff, Client market data administrators, Legal and contracts teams on both sides, Account managers handling escalations

Deep Analysis (Premium)

Financial Impact

$100,000+ annual for major clients in disputes and rework. • $100,000+ annual in staff rework, credit notes, and foregone collections. • $100,000+ annual internal costs for compliance audits and credits.

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Current Workarounds

Custom Excel models to simulate fee impacts by customer type. • Email threads and Excel reconciliations for dispute logs. • Manual audits in Excel to map system users to licensed IDs.

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Under‑licensed and under‑reported market data usage causing recurring revenue leakage

Low- to mid-single digit % of addressable market data revenue; for a large exchange with $500M+ annual data revenues, this implies several million dollars per year in lost billings.

Overspending on proprietary feeds and connectivity far above cost to provide

For an active broker or trading firm purchasing multiple prop feeds and high‑performance connectivity, this can run into several million dollars per year in avoidable spend compared with cost‑reflective pricing.[4]

Delayed collections from disputed and manually reconciled market data invoices

For a data business with tens or hundreds of millions in annual billings, even a 15–30 day extension in collection cycles represents material working capital drag, often in the multi‑million‑dollar equivalent of tied‑up cash at any time.

Innovation and trading capacity constrained by high and rigid data licensing costs

Lost incremental trading, order flow, and listing activity is not precisely quantified, but the report indicates that exchanges have maintained overall equity market revenues despite lower trading volumes by charging higher prices to fewer participants, implying foregone growth in both trading and data revenue.[3]

Regulatory challenges and rule changes tied to conflicts of interest in market data sales

Multi‑million‑dollar legal and regulatory engagement costs across major U.S. exchanges over several years, plus revenue risk from mandated changes to data infrastructure and potential fee reductions.[2][9]

Unauthorized redistribution and gray‑market use of exchange market data

For a large exchange, under‑reported and unauthorized usage can represent a low‑single‑digit percentage of total data revenue—potentially several million dollars annually that must be recouped via audits or is never billed.[6]

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