There is a major difference in knowing what one’s market data costs are, and what they should be. This makes strategic planning more of a challenge, especially when data, information and related services can be the third highest business cost after salaries and property. CFO’s and business managers responsible for P&Ls quite rightfully ask three questions:

1.“Do I have the best deal for the market data I consume”, plus

2.for critical benchmarks “Am I paying a fair price?”  quickly followed by,

3.“How do I find out?”

If the price list is not published, nought out of three of these questions can be answered with any degree of certainty.

Regulators insist on fair and level playing fields in financial markets encouraging competition to flourish, however this is hard to achieve when costs lack transparency, especially for indices and credit ratings which are now so integral to investment decision making, first in price discovery and then valuing an asset. Both play indispensable roles in the analytics and calculations leading up to trade execution, then how a security is valued afterwards and any decisions to either buy more or sell. Changes in either have material impacts.

This ultimately feeds through to the costs of taking such premium services and data in terms of Transaction Cost Analytics (TCA) along with Total Expense Ratios (TER).


Sadly self-regulation usually is a mere stop on the road to full regulation, and market data is likely to be no different. Regulators insist on fair and level playing fields in financial markets encouraging competition to be fought over through merit, avoiding unfair advantages. It is one of the reason why Exchanges as venues in many jurisdictions cannot change fees, policies or agreements without prior scrutiny and approval. Part of the reason is because of the dominance of the exchanges in their home markets.

Naturally Index Creators and Credit Ratings Agencies will claim they are far more open to market forces than exchanges and therefore should not publish their prices lists nor seek approval for setting fee levels. But to what extent are their markets open? The arguments against are pretty compelling:

1.Index creation and credit ratings are oligarchical in practice, though no collusion. Changing from one to another is challenging to say the least, and they know it

2.The top Index creators and credit ratings agencies are powerful brands dominating their markets. Asset owners drive selection and they go for what they know

3.Consumption is often based upon consumer mandates specifying specific indices and/or credit ratings as benchmarks. Once these mandates are in place, replacement becomes resource intensive, never mind potential legal implications

4.The chasm in size between the big index creators and the rest is vast, they are under no threat. While the big 3 credit ratings agencies global reach extends to the vast majority of local domestic CRAs either through direct stakes or providing IP.

5.They aggressively protect their Intellectual Property Rights and ruthlessly deal with out of scope usage which when discovered either results in substantial back fees to the point of breach or encouraged to sign up to new products to generate go forward revenue flows


The chances of the exchange’s data fees becoming regulated with price controls seem to appear higher each day. Some are planning on a when not if basis already. This is not the case for critical data sets like indices or credit ratings.

The sheer pervasiveness and utilisation of indices and credit ratings in investment decisions exceeds that of an exchange’s own data, yet they do not publish prices and often not clear about how their pricing models function (with the notable exception of any AUM based fee structures). Today’s investors demand benchmarks, and without access to either indices or credit ratings modern financial markets would perform under severe handicap.

In conclusion – Not publishing price lists for critical and must have data and information services works against the principle of the level playing field and market transparency and distorts the costs of investments.

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Keiren Harris 27 July 2023

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