🇺🇸United States

High data prices and complex licensing driving client frustration and reduced participation

3 verified sources

Definition

The SEC notes that between 2010 and 2018, some data fees for the same information increased by 967% to 2,916%, while industry comment letters complain about the burden of these costs on market participants.[2] European research similarly reports that rising and opaque market data prices "burden market participants" and rely on complex user‑type and usage‑based fee structures that make innovators "take on indeterminate financial risk," discouraging use.[3]

Key Findings

  • Financial Impact: Lost or downgraded subscriptions by price‑sensitive firms; reduced adoption of advanced data products; and potential migration of order flow to venues perceived as fairer—collectively a recurring revenue hit that is material though not precisely quantified in public sources.[2][3]
  • Frequency: Daily (influences ongoing client purchasing and usage decisions)
  • Root Cause: Steep, non‑transparent price increases over time; monopolistic control over essential data; and licensing terms that are difficult to predict and budget for as usage scales.[2][3][5]

Why This Matters

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

Affected Stakeholders

Buy‑side and sell‑side trading desks, Retail brokers and neobrokers, Fintech product managers building on exchange data, Exchange sales and account management teams

Deep Analysis (Premium)

Financial Impact

For data vendors, repeated pushback and non-renewals from broker-dealers and market makers over high and opaque data costs lead to downgraded packages and lost advanced data/analytics sales, conservatively bleeding mid- to high six figures to low seven figures in annual recurring revenue per year across the client base ($500k–$5M/yr), plus additional soft loss from order flow and trading activity migrating to venues perceived as offering more transparent or fair data terms.

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Current Workarounds

Market surveillance stakeholders, commercial teams, and data licensing specialists manually re-scope data packages, simulate usage, and model alternative licensing combinations in spreadsheets and ad-hoc tools, while using email/IM back-and-forth with clients to negotiate who really needs which feeds, levels, and user entitlements to keep the invoice below an acceptable threshold.

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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]

Complex fee and licensing structures driving billing disputes and rework

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]

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]

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