Released today, the new report by Market Structure Partners (MSP) entitled ‘There is no Market in Market Data’ revealed findings that suggest incumbent venues are supplementing dwindling equity market revenues and volumes with hikes in market data pricing, ultimately leading to what the paper calls “stifling of growth and innovation”.

Among the exchanges listed in the report are Euronext, Deutsche Börse, the London Stock Exchange Group’s Turquoise and Nasdaq Nordics.

Read more – Some exchanges pocketing nearly £5 billion from ‘inexplicable’ market data price rises, finds report

“The data presented in the report contains multiple errors and does not accurately present Turquoise’s trading volumes and market data costs,” said a spokesperson for LSEG.

“The conclusions drawn in the report are therefore inaccurate and we will be contacting MSP to request the necessary extensive corrections throughout.”

One example of an inaccuracy in the findings noted by LSEG are figures relating to its private investors data fees. The report claims that LSEG has increased its data fees for private investors by over 150% between 2017-2024.

“Market data for retail investors on Turquoise has always been free and there was no change in the LSE data charge for this community over this period,” continued the LSEG spokesperson. “Since January 2025, LSE fees for market data for retail have also been waived. Furthermore, all of LSEG’s equity trading entities are required to make Reasonable Commercial Basis disclosures.”

At the heart of MSP’s findings released on Tuesday is the claim that market data – which MSP argues should be a by-product of trading volumes – has grown to become a far larger revenue stream than it should be that is supplementing other business areas such as trading that are suffering from a lack of innovation and attention from exchanges.

In its findings, MSP claims that trading turnover on LSEG’s Turquoise reduced by 61% between 2020 and 2022. However, in the same period, market data revenues increased by 16.5%, according to the report.

Naming other specific venues, the report also found that between 2020 and 2023 – despite total equity markets transacting value reducing by 17% – Euronext only saw total equity market revenue decline by 0.5% thanks to an 8% uptick in market data revenue.

“An independent analysis commissioned by FESE and published by Oxera in September 2024, shows exchanges market data pricing remains reasonable, reflecting shifts in data consumption, evolving fee structures, and broader industry costs,” a Euronext spokesperson told The TRADE in response to the report.

The MSP report also names Deutsche Börse and Nasdaq Nordics.

In its findings it suggests that between 2020 and 2023, Deutsche Börse saw transacted value in equity markets reduced by 29%. Total equity market revenue, however, only declined by 12% due to a 10% increase in market data revenue.

The research on Nasdaq Nordics tells a similar story, seeing a 27% reduction in transacted value in equity markets between 2021 and 2023 but only seeing a 9% decline in total equity market revenue stemming from a 4% rise in market data revenue.

“The claim that exchange data fees are increasing is misleading; any price increases have been below inflation over the same period, and we are fully committed to fair and transparent pricing,” a spokesperson for Nasdaq Nordics told The TRADE.

“We are relentlessly focused on innovation and enhancing the resilience of our world class markets and data services, to ensure they keep up with the accelerating pace and sophistication of trading.”

Deutsche Börse did not respond to a request for comment at the time of publication.

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The fine related to an incident when the spread between Nordic and German electricity prices increased unexpectedly, and commodities trader Einar Aas was unable to cover losses.   

An investigation by Sweden’s Finansinspektione (FI) following the incident found that Aas had insufficient funds to cover the losses and Nasdaq had incorrectly calculated the margin needed, forcing it to withdraw cash from its default fund.  

Nasdaq Clearing AB had insufficient requirements in place relating to clearing members’ financial and operational capacity, according to FI, which led to the incorrect calculations and insufficient margin calls.

“Because the collateral the member had pledged to Nasdaq Clearing was insufficient for covering the loss in the portfolio, money was withdrawn from the default fund, which consists of contributions from all clearing members and is intended to cover losses of this nature,” FI stated.

Nasdaq Clearing was also in violation of EU regulation on OTC derivatives, central counterparties, and trade repositories by investing its own funds in derivatives too long after the default event. FI added this resulted in prohibited exposures to credit and market risks. 

In March, ABN Amro’s clearing arm incurred a $200 million loss after a client failed to meet margin calls during the increased market volatility due to the coronavirus pandemic. ABN Amro Clearing was forced to close-out the client’s position to prevent further losses.

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Nasdaq Nordic has confirmed it will use SIX Securities Service’s x-clear for clearing its cash equities markets from February this year.

The agreement will see SIX become a third interoperating central counterparty for Nasdaq, clearing trades executed on its Nordic trading platforms.

Nasdaq Nordic’s cash equity markets include trading venues in Copenhagen, Helsinki, Stockholm and the First North Sweden platform.

SIX Securities Services claims to centrally manage counterparty risk and reduce post-trade costs via its new clearing service, which allows members to have one net settlement for all trades across all platforms cleared by x-clear.

“Cross-platform netting and cross-margining of risk combined with a tiered pricing structure offer clients the best suited solution for their needs in terms of scale, cost, risk and liquidity,” SIX explained.

Head of markets and clients at SIX Securities Services, Valerio Rancone, added the partnership is an “important step which offers clients an opportunity to extend their clearing consolidation with SIX x-clear and further optimise their post trade processing.”

The agreement is subject to regulatory approval and operational arrangements and is expected to close on 20 February this year.

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